<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
:
In the Matter of :
:
CENTRAL AND SOUTH WEST SERVICES, INC. : CERTIFICATE
CENTRAL AND SOUTH WEST CORPORATION :
: OF
File No. 70-8459 :
: NOTIFICATION
(Public Utility Holding Company Act of 1935) :
:
_____________________________________________:
Central and South West Services, Inc. ("CSWS") and
Central and South West Corporation ("CSW") hereby certify that:
1. On December 22, 1994, CSWS and CSW entered into a
Credit Agreement dated as of December 22, 1994 with First
Interstate Bank of Texas, N.A., as agent.
2. The transaction has been carried out in accordance
with the terms and conditions of, and for the purposes
represented in, the Form U-1 Application-Declaration of CSWS and
CSW in File No. 70-8459, and in accordance with the terms and
conditions of the Commission's order dated November 30, 1994,
permitting the Application-Declaration, as amended, to become
effective.
The following exhibits are filed herewith:
Exhibit 2 - Credit Agreement and form of promissory
note to evidence borrowing from the Banks.
Exhibit 5 - Final or "past tense" opinion of Milbank,
Tweed, Hadley & McCloy, counsel to CSWS and
CSW.
<PAGE> 2
S I G N A T U R E
- - - - - - - - -
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, as amended, the undersigned company
has duly caused this document to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: January 9, 1995
CENTRAL AND SOUTH WEST SERVICES, INC.
By: /s/ SHIRLEY S. BRIONES
Shirley S. Briones
Treasurer
<PAGE> 3
S I G N A T U R E
- - - - - - - - -
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, as amended, the undersigned company
has duly caused this document to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: January 9, 1995
CENTRAL AND SOUTH WEST CORPORATION
By: /s/ STEPHEN J. MCDONNELL
Stephen J. McDonnell
Treasurer
<PAGE> 1
EXHIBIT INDEX
Exhibit Transmission
Number Exhibit Method
- ------- ------- ------------
2 Credit Agreement and form of Electronic
promissory note to evidence
borrowing from the Banks.
5 Final or "past tense" opinion of Electronic
Milbank, Tweed, Hadley & McCloy,
counsel to CSWS and CSW.
<PAGE> 1
EXHIBIT 2
---------
************************************************************
CENTRAL AND SOUTH WEST SERVICES, INC.
as Borrower
and
CENTRAL AND SOUTH WEST CORPORATION
as Guarantor
_____________________________
CREDIT AGREEMENT
Dated as of December 22, 1994
FIRST INTERSTATE BANK OF TEXAS, N.A.
as Agent
************************************************************
<PAGE> 2
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to
which it is attached but is inserted for convenience of reference
only.
Page
Section 1. Definitions and Accounting Matters . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . 11
1.03 Types of Loans. . . . . . . . . . . . . . . . . . . 11
Section 2. Commitments, Loans, Notes and Prepayments. . . . . 11
2.01 Loans . . . . . . . . . . . . . . . . . . . . . . . 11
2.02 Borrowings. . . . . . . . . . . . . . . . . . . . . 12
2.03 Lending Offices . . . . . . . . . . . . . . . . . . 12
2.04 Several Obligations; Remedies Independent . . . . . 12
2.05 Notes . . . . . . . . . . . . . . . . . . . . . . . 12
2.06 Prepayments and Conversions or Continuations of
Loans . . . . . . . . . . . . . . . . . . . . . . 13
2.07 Certain Fees. . . . . . . . . . . . . . . . . . . . 13
Section 3. Payments of Principal and Interest . . . . . . . . 13
3.01 Repayment of Loans. . . . . . . . . . . . . . . . . 13
3.02 Interest. . . . . . . . . . . . . . . . . . . . . . 13
Section 4. Payments; Pro Rata Treatment; Computations;
Etc. . . . . . . . . . . . . . . . . . . . . . . 15
4.01 Payments. . . . . . . . . . . . . . . . . . . . . . 15
4.02 Pro Rata Treatment. . . . . . . . . . . . . . . . . 15
4.03 Computations. . . . . . . . . . . . . . . . . . . . 16
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . . 16
4.05 Certain Notices . . . . . . . . . . . . . . . . . . 16
4.06 Non-Receipt of Funds by the Agent . . . . . . . . . 17
4.07 Sharing of Payments.. . . . . . . . . . . . . . . . 18
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . . 19
5.01 Additional Costs. . . . . . . . . . . . . . . . . . 19
5.02 Limitation on Types of Loans. . . . . . . . . . . . 22
5.03 Illegality. . . . . . . . . . . . . . . . . . . . . 22
5.04 Treatment of Affected Loans . . . . . . . . . . . . 23
5.05 Compensation. . . . . . . . . . . . . . . . . . . . 24
5.06 U.S. Taxes. . . . . . . . . . . . . . . . . . . . . 24
5.07 Replacement of Banks. . . . . . . . . . . . . . . . 25
(i)
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 6. Guarantee. . . . . . . . . . . . . . . . . . . . . 26
6.01 The Guarantee . . . . . . . . . . . . . . . . . . . 26
6.02 Obligations Unconditional . . . . . . . . . . . . . 27
6.03 Reinstatement . . . . . . . . . . . . . . . . . . . 28
6.04 Subrogation . . . . . . . . . . . . . . . . . . . . 28
6.05 Remedies. . . . . . . . . . . . . . . . . . . . . . 29
6.06 Continuing Guarantee. . . . . . . . . . . . . . . . 29
Section 7. Conditions Precedent . . . . . . . . . . . . . . . 29
7.01 Conditions for Making Loans . . . . . . . . . . . . 29
7.02 Additional Conditions . . . . . . . . . . . . . . . 30
Section 8. Representations and Warranties . . . . . . . . . . 31
8.01 Corporate Existence . . . . . . . . . . . . . . . . 31
8.02 Financial Condition . . . . . . . . . . . . . . . . 31
8.03 Litigation. . . . . . . . . . . . . . . . . . . . . 31
8.04 No Breach . . . . . . . . . . . . . . . . . . . . . 31
8.05 Action. . . . . . . . . . . . . . . . . . . . . . . 32
8.06 Approvals . . . . . . . . . . . . . . . . . . . . . 32
8.07 Margin Securities . . . . . . . . . . . . . . . . . 32
8.08 Disclosure. . . . . . . . . . . . . . . . . . . . . 33
Section 9. Covenants of the Company and the Guarantor . . . . 33
9.01 Financial Statements Etc. . . . . . . . . . . . . . 33
9.02 Notice of Material Events . . . . . . . . . . . . . 35
9.03 Existence, Etc. . . . . . . . . . . . . . . . . . . 35
9.04 Insurance . . . . . . . . . . . . . . . . . . . . . 36
9.05 Prohibition of Fundamental Changes. . . . . . . . . 36
9.06 Ownership of the Company. . . . . . . . . . . . . . 37
9.07 Compliance with ERISA . . . . . . . . . . . . . . . 37
9.08 Line of Business. . . . . . . . . . . . . . . . . . 37
9.09 Consolidated Net Worth. . . . . . . . . . . . . . . 37
Section 10. Events of Default . . . . . . . . . . . . . . . . 37
Section 11. The Agent . . . . . . . . . . . . . . . . . . . . 40
11.01 Appointment, Powers and Immunities . . . . . . . . 40
11.02 Reliance by Agent. . . . . . . . . . . . . . . . . 40
11.03 Defaults . . . . . . . . . . . . . . . . . . . . . 41
11.04 Rights as a Bank . . . . . . . . . . . . . . . . . 41
11.05 Indemnification. . . . . . . . . . . . . . . . . . 42
11.06 Non-Reliance on Agent and Other Banks. . . . . . . 42
11.07 Failure to Act . . . . . . . . . . . . . . . . . . 43
11.08 Resignation or Removal of Agent. . . . . . . . . . 43
(ii)
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 12. Miscellaneous . . . . . . . . . . . . . . . . . . 43
12.01 Waiver . . . . . . . . . . . . . . . . . . . . . . 43
12.02 Notices. . . . . . . . . . . . . . . . . . . . . . 43
12.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . 44
12.04 Amendments, Etc. . . . . . . . . . . . . . . . . . 44
12.05 Successors and Assigns . . . . . . . . . . . . . . 45
12.06 Assignments and Participations . . . . . . . . . . 45
12.07 Survival . . . . . . . . . . . . . . . . . . . . . 47
12.08 Captions . . . . . . . . . . . . . . . . . . . . . 48
12.09 Counterparts . . . . . . . . . . . . . . . . . . . 48
12.10 Governing Law. . . . . . . . . . . . . . . . . . . 48
12.11 Waiver of Jury Trial . . . . . . . . . . . . . . . 48
12.12 Treatment of Certain Information;
Confidentiality. . . . . . . . . . . . . . . . . 48
12.13 Interest . . . . . . . . . . . . . . . . . . . . . 49
12.14 NO ORAL AGREEMENTS . . . . . . . . . . . . . . . . 51
EXHIBIT A - Form of Note
EXHIBIT B - Form of Opinion of Counsel to the Obligors
EXHIBIT C - Form of Opinion of Special Texas Counsel to Obligors
EXHIBIT D - Form of Confidentiality Agreement
EXHIBIT E - Form of Assignment
(iii)
<PAGE> 5
CREDIT AGREEMENT dated as of December 22, 1994,
between: CENTRAL AND SOUTH WEST SERVICES, INC., a corporation
duly organized and validly existing under the laws of the State
of Texas (the "Company"); CENTRAL AND SOUTH WEST CORPORATION, a
corporation duly organized and validly existing under the laws of
the State of Delaware (the "Guarantor" and, together with the
Company, the "Obligors"); each of the lenders that is a signatory
hereto identified under the caption "BANKS" on the signature
pages hereto or that, pursuant to Section 12.06(b) hereof, shall
become a "Bank" hereunder (individually, a "Bank" and,
collectively, the "Banks"); and FIRST INTERSTATE BANK OF TEXAS,
N.A., as agent for the Banks (in such capacity, together with its
successors in such capacity, the "Agent").
Each of the Guarantor and the Company has requested
that the Banks make loans to the Company in an aggregate
principal amount not exceeding $60,000,000 and the Banks are
prepared to make such loans upon the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"Applicable Lending Office" shall mean, for each Bank
and for each Type of Loan, the "Lending Office" of such Bank (or
of an affiliate of such Bank) designated for such Type of Loan on
the signature pages hereof or such other office of such Bank (or
of an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Company as the office by which its
Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, at any time of
determination and with respect to Loans of any Type, the rate set
forth below opposite such Type of Loan and under the Rating Group
in which the commercial paper of the Guarantor is rated at such
time:
=================================================================
Rating Group 1 Rating Group 2 Rating Group 3
=================================================================
Base Rate
Loans 0.000% 0.000% 0.000%
- -----------------------------------------------------------------
CD Loans 0.475% 0.575% 0.875%
- -----------------------------------------------------------------
Eurodollar
Loans 0.350% 0.450% 0.750%
- -----------------------------------------------------------------
<PAGE> 6
Each change in the Applicable Margin for any Loan resulting from
a change in the applicable Rating Group shall take effect (a) in
the case of each Base Rate Loan, on the first Quarterly Date
following such change, (ii) in the case of a Fixed Rate Loan, on
the last day of the Interest Period therefor prevailing at the
time of such change or, if earlier, on the first Quarterly Date
following such change, and (iii) in the case of any Loan, upon
the Conversion of such Loan to a Loan of another Type (but only
with respect to the principal amount so Converted).
"Assessment Rate" shall mean, for any Interest Period
for any CD Loan, the average of the highest and lowest annual
assessment rates (determined by the Agent as at the first day of
such Interest Period and rounded upwards, if necessary, to the
nearest 1/100 of 1%) that the Federal Deposit Insurance
Corporation (or any successor) charges members of the Bank
Insurance Fund pursuant to 12 C.F.R. Part 327 (or any successor)
for such Corporation's (or such successor's) insuring time
deposits at offices of such members in the United States of
America.
"Bankruptcy Code" shall mean the Federal Bankruptcy
Code of 1978, as amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum
equal to the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest
at rates based upon the Base Rate.
"Business Day" shall mean any day (a) on which
commercial banks are not authorized or required to close in
Dallas, Texas and (b) if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period,
that is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"CD Loans" shall mean Loans that bear interest at rates
based on rates referred to in clause (b) of the definition of
"Fixed Base Rate" in this Section 1.01.
"Closing Date" shall mean the date upon which the
initial Loan hereunder is made.
<PAGE> 7
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" shall mean, as to each Bank, the
obligation of such Bank to make Loans in an aggregate principal
amount up to but not exceeding the amount set opposite such
Bank's name on the signature pages hereof under the caption
"Commitment".
"Commitment Termination Date" shall mean December 31,
1994.
"Continue", "Continuation" and "Continued" shall refer
to the continuation pursuant to Section 2.06 hereof of a Fixed
Rate Loan of one Type as a Fixed Rate Loan of the same Type from
one Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to
a conversion pursuant to Section 2.06 hereof of one Type of Loans
into another Type of Loans, which may be accompanied by the
transfer by a Bank (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
"Default" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an Event
of Default.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Duff & Phelps" shall mean Duff & Phelps Credit Rating
Co. and any successor thereto that is a nationally recognized
rating agency or, if neither Duff & Phelps Credit Rating Co. nor
any such successor shall be in the business of rating commercial
paper, a nationally recognized rating agency in the United States
of America selected by the Guarantor with the approval of the
Majority Banks.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade
or business that is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the
Guarantor is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which the Guarantor is a
member.
<PAGE> 8
"Eurodollar Loans" shall mean Loans that bear interest
at rates based on rates referred to in clause (a) of the
definition of "Fixed Base Rate" in this Section 1.01.
"Event of Default" shall have the meaning assigned to
such term in Section 10 hereof.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for
such Business Day shall be the average rate charged to FITX on
such Business Day on such transactions as determined by the
Agent.
"FITX" shall mean First Interstate Bank of Texas, N.A.
"Fixed Base Rate" shall mean, with respect to any Fixed
Rate Loan for any Interest Period therefor:
(a) if such Loan is a Eurodollar Loan, the rate per
annum quoted by the Reference Bank at approximately
11:00 a.m. London time (or as soon thereafter as
practicable) on the date two Business Days prior to the
first day of such Interest Period for the offering by the
Reference Bank to leading banks in the London interbank
market of Dollar deposits having a term comparable to such
Interest Period and in an amount comparable to the principal
amount of the Eurodollar Loan to be made by the FITX for
such Interest Period; and
(b) if such Loan is a CD Loan, the rate per annum
determined by the Reference Bank to be the average of the
bid rates quoted to the Reference Bank at approximately
10:00 a.m. Dallas time (or as soon thereafter as
practicable) on the first day of such Interest Period by at
least two certificate of deposit dealers of recognized
national standing selected by the Reference Bank for the
purchase at face value of certificates of deposit of the
Reference Bank having a term comparable to such Interest
Period and in an amount comparable to the principal amount
of the CD Loan to be made by the FITX for such Interest
Period; provided that, if such quotations from such dealers
<PAGE> 9
are not available to the Reference Bank, the Reference Bank
shall notify the Agent of a reasonably equivalent rate
determined by it on the basis of another source or sources
selected by it.
"Fixed Rate" shall mean, for any Fixed Rate Loan for
any Interest Period therefor, a rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) determined by the Agent
to be equal to (a) in the case of a CD Loan, the sum of (i) the
Fixed Base Rate for such Loan for such Interest Period divided by
1 minus the Reserve Requirement (if any) for such Loan for such
Interest Period plus (ii) the Assessment Rate for such Interest
Period and (b) in the case of a Eurodollar Loan, the Fixed Base
Rate for such Loan for such Interest Period.
"Fixed Rate Loans" shall mean CD Loans and Eurodollar
Loans.
"GAAP" shall mean generally accepted accounting
principles as in effect from time to time.
"Interest Period" shall mean:
(a) with respect to any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or
Converted from a Loan of another Type or the last day of the
next preceding Interest Period for such Loan and ending on
the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Company may
select as provided in Section 4.05 hereof, except that each
Interest Period that commences on the last Business Day of a
calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month; and
(b) with respect to any CD Loan, each period
commencing on the date such CD Loan is made or Converted
from a Loan of another Type or the last day of the next
preceding Interest Period for such Loan and ending on the
day 30, 60, 90 or 180 days thereafter, as the Company may
select as provided in Section 4.05 hereof.
Notwithstanding the foregoing: (i) no Interest Period may end
after the Maturity Date; (ii) each Interest Period that would
otherwise end on a day that is not a Business Day shall end on
the next succeeding Business Day (or, in the case of an Interest
Period for a Eurodollar Loan, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next
preceding Business Day); and (iii) notwithstanding clause (i)
above, no Interest Period shall have a duration of less than one
<PAGE> 10
month (in the case of a Eurodollar Loan) or 30 days (in the case
of a CD Loan) and, if the Interest Period for any Fixed Rate Loan
would otherwise be a shorter period, such Loan shall not be
available hereunder for such period.
"Loan Documents" shall mean this Agreement, the Notes
and all other instruments, agreements and other documentation
executed and delivered pursuant to or in connection with this
Agreement, as such instruments, agreements and documentation may
be amended, renewed, extended, supplemented or otherwise modified
from time to time.
"Loans" shall mean the loans provided for in
Section 2.01 hereof, which may be Base Rate Loans and/or Fixed
Rate Loans.
"Majority Banks" shall mean Banks having more than 50%
of the aggregate amount of the Commitments or, if the Commitments
shall have terminated or have been fully funded, Banks holding
more than 50% of the aggregate unpaid principal amount of the
Loans.
"Material Adverse Effect" shall mean a material adverse
effect on the financial condition, business, operations or
properties of the Guarantor and its Subsidiaries taken as a
whole.
"Maturity Date" shall mean December 1, 2001 or, if such
date is not a Business Day, the Business Day immediately
preceding such date.
"Maximum Rate" shall mean the maximum rate of
nonusurious interest permitted from day to day by applicable law,
including as to Article 5069-1.04, Vernon's Texas Civil Statutes
(and as the same may be incorporated by reference in other Texas
statutes), but otherwise without limitation, that rate based upon
the "indicated rate ceiling" and calculated after taking into
account any and all relevant fees, payments, and other charges
contracted for, charged or received in connection with the Loan
Documents which are deemed to be interest under applicable law.
"Moody's" shall mean Moody's Investors Service, Inc.
and any successor thereto that is a nationally recognized rating
agency or, if neither Moody's Investors Service, Inc. nor any
such successor shall be in the business of rating commercial
paper, a nationally recognized rating agency in the United States
of America selected by the Guarantor with the approval of the
Majority Banks.
<PAGE> 11
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Guarantor or any ERISA Affiliate and that
is covered by Title IV of ERISA.
"Notes" shall mean the promissory notes provided for by
Section 2.05 hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"Obligations" shall mean all obligations, indebtedness,
and liabilities of the Company to the Agent and the Banks, or any
of them, arising pursuant to any of the Loan Documents, now
existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, including, without limitation, the
obligations, indebtedness, and liabilities of the Company under
this Agreement and the other Loan Documents and all interest
accruing thereon and all attorneys' fees and other expenses
incurred in the enforcement or collection thereof.
"Payment Default Period" shall mean a period (including
the first day but excluding the last day) commencing on the date
of any failure by the Company, after the lapse of any applicable
grace period, to pay when due (at stated maturity, by
acceleration or otherwise) any principal of or interest on any
Loan and ending on the date on which such failure (and any other
intervening such failures) shall be cured.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Guarantor or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan under this Agreement or any Note, during
any Payment Default Period, a rate per annum during such Payment
Default Period equal to 1% plus the Base Rate as in effect from
time to time plus the Applicable Margin for Base Rate Loans
(provided that, in the case of principal of a Fixed Rate Loan
when the first day of such Payment Default Period is a day other
than the last day of the Interest Period therefor, the
<PAGE> 12
"Post-Default Rate" for such principal shall be, for the period
from and including the first day of such Payment Default Period
to but excluding the last day of such Interest Period, 1% plus
the interest rate for such Loan as provided in Section 3.02(b)
hereof and, thereafter, the rate provided for above in this
definition).
"Prime Rate" shall mean the rate of interest from time
to time announced by the Reference Bank at its principal office
(which is located on the date hereof at 707 Wilshire Blvd., Los
Angeles, CA 90017) as its prime commercial lending rate.
"Principal Office" shall mean the principal office of
FITX, located on the date hereof at 1445 Ross Avenue, Dallas
Texas, 75202.
"Quarterly Dates" shall mean the first Business Day of
January, April, July and October in each year, the first of which
shall be the first such day after the date hereof.
"Rating Agency" shall mean any of Duff & Phelps,
Moody's or Standard & Poor's.
"Rating Group" shall mean any of Rating Group 1, Rating
Group 2 or Rating Group 3, of which (for purposes of the
following sentence) Rating Group 1 shall be deemed to be the
highest Rating Group and Rating Group 3 shall be deemed to be the
lowest Rating Group. In the event that the commercial paper
issued by the Guarantor is rated by only one Rating Agency, the
determination of the appropriate Rating Group shall be made
solely by reference to the rating by such Rating Agency. In the
event that the commercial paper issued by the Guarantor is rated
by exactly two Rating Agencies, the determination of the
appropriate Rating Group shall be made solely by reference to the
rating by the Rating Agency that would result in the lowest
Rating Group. In the event that the commercial paper issued by
the Guarantor is rated by exactly three Rating Agencies, the
determination of the appropriate Rating Group shall be made
solely by reference to (a) the ratings by two Rating Agencies, if
any, that would result in the same Rating Group or (b) if no such
ratings exist that would result in the same Rating Group, the
rating by the Rating Agency remaining after eliminating the
ratings by the two Rating Agencies that would result in the
highest Rating Group and the lowest Rating Group.
"Rating Group 1" shall mean (subject to the definition
of "Rating Group" in this Section 1.01) a rating of P1 (or its
equivalent) or higher by Moody's or a rating of A1 (or its
equivalent) or higher by Standard & Poor's or a rating of D1 (or
its equivalent) or higher by Duff & Phelps.
<PAGE> 13
"Rating Group 2" shall mean (subject to the definition
of "Rating Group" in this Section 1.01) a rating of P2 (or its
equivalent) or higher by Moody's or a rating of A2 (or its
equivalent) or higher by Standard & Poor's or a rating of D2 (or
its equivalent) or higher by Duff & Phelps.
"Rating Group 3" shall mean (subject to the definition
of "Rating Group" in this Section 1.01) a rating lower than P2
(or its equivalent) by Moody's or a rating lower than A2 (or its
equivalent) by Standard & Poor's or a rating lower than D2 (or
its equivalent) by Duff & Phelps. If no Rating Agency is rating
the Guarantor's commercial paper, such commercial paper shall be
deemed to be rated in Rating Group 3.
"Reference Bank" shall mean First Interstate Bank of
California.
"Regulations A, D, U and X" shall mean, respectively,
Regulations A, D, U and X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.
"Regulatory Change" shall mean, with respect to any
Bank, any change after the date hereof in Federal, state or
foreign law or regulation (including, without limitation,
Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks
including such Bank of or under any Federal, state or foreign law
or regulation (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reserve Requirement" shall mean, for any Interest
Period for any CD Loan, the average maximum rate at which
reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest
Period under Regulation D by member banks of the Federal Reserve
System in New York City with deposits exceeding one billion
Dollars against non-personal Dollar time deposits in an amount of
$100,000 or more. Without limiting the effect of the foregoing,
the Reserve Requirement shall include any other reserves required
to be maintained by such member banks by reason of any Regulatory
Change against (a) any category of liabilities that includes
deposits by reference to which the Fixed Base Rate for CD Loans
is to be determined as provided in the definition of "Fixed Base
Rate" in this Section 1.01 or (b) any category of extensions of
credit or other assets that includes CD Loans.
<PAGE> 14
"Standard & Poor's" shall mean Standard & Poor's Rating
Group, a division of McGraw-Hill, Inc., and any successor thereto
that is a nationally recognized rating agency or, if neither such
division nor any such successor shall be in the business of
rating commercial paper, a nationally recognized rating agency in
the United States of America selected by the Guarantor with the
approval of the Majority Banks.
"Subsidiary" shall mean, with respect to any Person,
any corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"U.S. Person" shall mean a citizen or resident of the
United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United
States of America or any State thereof, or any estate or trust
that is subject to Federal income taxation regardless of the
source of its income.
"U.S. Taxes" shall mean any present or future tax,
assessment or other charge or levy imposed by or on behalf of the
United States of America or any taxing authority thereof.
"Wholly Owned Subsidiary" shall mean, with respect to
any Person, any corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
1.02 Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Banks hereunder
shall be prepared, in accordance with GAAP.
<PAGE> 15
1.03 Types of Loans. Loans hereunder are
distinguished by "Type". The "Type" of a Loan refers to whether
such Loan is a Base Rate Loan, a CD Loan or a Eurodollar Loan,
each of which constitutes a Type.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans. Each Bank severally agrees, on the terms
and conditions of this Agreement, to make a single term loan to
the Company in Dollars on or before the Commitment Termination
Date in a principal amount up to but not exceeding the amount of
the Commitment of such Bank. Thereafter the Company may Convert
Loans of one Type into Loans of another Type (as provided in
Section 2.06 hereof) or Continue Loans of one Type as Loans of
the same Type (as provided in Section 2.06 hereof); provided that
no more than six separate Interest Periods in respect of Fixed
Rate Loans from each Bank may be outstanding at any one time.
2.02 Borrowings. The Company shall give the Agent
notice of the borrowing hereunder as provided in Section 4.05
hereof. Not later than 1:00 p.m. Dallas time on the date
specified for such borrowing hereunder, each Bank shall make
available the amount of the Loan or Loans to be made by it on
such date to the Agent, at account number 0040185019606
maintained by the Agent with FITX at the Principal Office, in
immediately available funds, for account of the Company. The
amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company on
such date by depositing the same, in immediately available funds,
in an account of the Company maintained with Mellon Bank, N.A.,
account number 100-7079, ABA # 043-000-261.
2.03 Lending Offices. The Loans of each Type made by
each Bank shall be made and maintained at such Bank's Applicable
Lending Office for Loans of such Type.
2.04 Several Obligations; Remedies Independent. The
failure of any Bank to make any Loan to be made by it on the date
specified therefor shall not relieve any other Bank of its
obligation to make its Loan on such date, but neither any Bank
nor the Agent shall be responsible for the failure of any other
Bank to make a Loan to be made by such other Bank, and (except as
otherwise provided in Section 4.06 hereof) no Bank shall have any
obligation to the Agent or any other Bank for the failure by such
Bank to make any Loan required to be made by such Bank. The
amounts payable by the Company at any time hereunder and under
the Notes to each Bank shall be a separate and independent debt
and each Bank shall be entitled to protect and enforce its rights
arising out of this Agreement and the Notes, and it shall not be
<PAGE> 16
necessary for any other Bank or the Agent to consent to, or be
joined as an additional party in, any proceedings for such
purposes.
2.05 Notes.
(a) The Loan made by each Bank shall be evidenced by a
single promissory note of the Company substantially in the form
of Exhibit A hereto, dated the date hereof, payable to such Bank
in a principal amount equal to the amount of its Commitment as
originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration
of Interest Period (if applicable) of each Loan made by each Bank
to the Company, and each payment made on account of the principal
thereof, shall be recorded by such Bank on its books and, prior
to any transfer of any Note held by it, endorsed by such Bank on
the schedule attached to such Note or any continuation thereof;
provided that the failure of such Bank to make any such
recordation or endorsement shall not affect the obligations of
the Company to make a payment when due of any amount owing
hereunder or under such Note in respect of the Loans.
(c) No Bank shall be entitled to have its Note
substituted or exchanged for any reason, or subdivided for
promissory notes of lesser denominations, except in connection
with a permitted assignment of all or any portion of such Bank's
Commitment, Loan and Note pursuant to Section 12.06 hereof (and,
if requested by any Bank, the Company agrees to so exchange any
Note).
2.06 Prepayments and Conversions or Continuations of
Loans. Subject to Section 4.04 hereof, the Company shall have
the right to prepay Loans, or to Convert Loans of one Type into
Loans of another Type or Continue Loans of one Type as Loans of
the same Type, at any time or from time to time, provided that:
(a) the Company shall give the Agent notice of each such
prepayment, Conversion or Continuation as provided in
Section 4.05 hereof; and (b) Fixed Rate Loans may be prepaid or
Converted only on the last day of an Interest Period for such
Loans.
2.07 Certain Fees. The Company shall pay to FITX the
fees referred to in the fee letter relating to this Agreement
dated December 21, 1994 in the amounts and at the times referred
to therein.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. On each Quarterly Date, if
any, on which the commercial paper issued by the Guarantor is
rated in Rating Group 3, the Company shall prepay the Loans in an
<PAGE> 17
aggregate principal amount equal to $2,150,000. The Company
hereby promises to pay to the Agent for account of each Bank the
outstanding principal of such Bank's Loan on the Maturity Date.
3.02 Interest. The Company hereby promises to pay to
the Agent for account of each Bank interest on the unpaid
principal amount of each Loan made by such Bank for the period
from and including the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per
annum:
(a) during such periods as such Loan is a Base Rate
Loan, the lesser of (i) the Maximum Rate, or (ii) the Base
Rate (as in effect from time to time) plus the Applicable
Margin and
(b) during such periods as such Loan is a Fixed Rate
Loan, for each Interest Period relating thereto, the lesser
of (i) the Maximum Rate, or (ii) the Fixed Rate for such
Loan for such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing: (A) subject to the following
clause (B), the Company hereby promises to pay to the Agent for
account of each Bank during any Payment Default Period interest
at the applicable Post-Default Rate on any principal of any Loan
made by such Bank payable by the Company hereunder or under the
Note held by such Bank to or for account of such Bank and (B) if
at any time the applicable rate of interest on any Loan provided
for in clause (a)(ii) or clause (b)(ii) of the first sentence of
this Section 3.02 or the preceding clause (A) (in either case,
the "Accrual Rate") shall exceed the Maximum Rate and thereafter
the Accrual Rate shall become less than the Maximum Rate, the
rate of interest payable hereunder and under the Notes shall be
the Maximum Rate until the Banks shall have received the amount
of interest which the Banks would have received if the Accrual
Rate had not been limited by the Maximum Rate during the period
of time the Accrual Rate exceeded the Maximum Rate. Accrued
interest on each Loan shall be payable (i) in the case of a Base
Rate Loan, quarterly on the Quarterly Dates and on the Maturity
Date, (ii) in the case of a Fixed Rate Loan, on the last day of
each Interest Period therefor and, if such Interest Period is
longer than 90 days (in the case of a CD Loan) or three months
(in the case of a Eurodollar Loan), at 90-day or three-month
intervals, respectively, following the first day of such Interest
Period, and (iii) in the case of any Loan, upon the payment or
prepayment thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid
or Converted), except that interest payable at the Post-Default
Rate shall be payable from time to time on demand. Promptly
after the determination of any interest rate provided for herein
or any change therein, the Agent shall give notice thereof to the
Banks to which such interest is payable and to the Company.
<PAGE> 18
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein or
in the fee letter referred to in Section 2.07 hereof, all
payments of principal, interest and other amounts to be made by
the Company under this Agreement and the Notes, shall be made in
Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Agent at account number
0040185019606, ABA # 113-001-064 maintained by the Agent with
FITX at the Principal Office, on the date on which such payment
shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding
Business Day).
(b) The Company shall, at the time of making each
payment under this Agreement or any Note for account of any Bank,
specify to the Agent (which shall so notify the intended
recipient(s) thereof) the Loans or other amounts payable by the
Company hereunder to which such payment is to be applied (and in
the event that the Company fails to so specify, or if an Event of
Default has occurred and is continuing, the Agent may distribute
such payment to the Banks for application in such manner as it or
the Majority Banks, subject to Section 4.02 hereof, may determine
to be appropriate).
(c) Each payment received by the Agent under this
Agreement or any Note for account of any Bank shall be paid by
the Agent promptly to such Bank, in immediately available funds,
for account of such Bank's Applicable Lending Office for the Loan
or other obligation in respect of which such payment is made.
(d) If the due date of any payment under this
Agreement or any Note would otherwise fall on a day that is not a
Business Day, such date shall be extended to the next succeeding
Business Day, and interest shall be payable for any principal so
extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein: (a) each borrowing from the Banks
under Section 2.01 hereof shall be made from the Banks pro rata
according to the amounts of their respective Commitments;
(b) except as otherwise provided in Section 5.04 hereof, Fixed
Rate Loans having the same Interest Period shall be allocated pro
rata among the Banks according to the amounts of their respective
Commitments (in the case of the making of Loans) or their
respective Loans (in the case of Conversions and Continuations of
Loans); (c) each payment or prepayment of principal of Loans by
the Company shall be made for account of the Banks pro rata in
<PAGE> 19
accordance with the respective unpaid principal amounts of the
Loans held by them; and (d) each payment of interest on Loans by
the Company shall be made for account of the Banks pro rata in
accordance with the amounts of interest on such Loans then due
and payable to the respective Banks.
4.03 Computations. Interest on Fixed Rate Loans shall
be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable and interest on Base
Rate Loans shall be computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) occurring in the period for
which payable. Notwithstanding the foregoing, for each day that
the Base Rate is calculated by reference to the Federal Funds
Rate, interest on Base Rate Loans shall be computed on the basis
of a year of 360 days and actual days elapsed (including the
first day but excluding the last day).
4.04 Minimum Amounts. Each borrowing, Conversion and
partial prepayment of principal of Loans shall be in an aggregate
amount at least equal to $5,000,000 or a larger multiple of
$1,000,000 (borrowings, Conversions or prepayments of or into
Loans of different Types or, in the case of Fixed Rate Loans,
having different Interest Periods at the same time hereunder to
be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period),
provided that the aggregate principal amount of Fixed Rate Loans
of each Type having the same Interest Period shall be in an
amount at least equal to $5,000,000 or a larger multiple of
$1,000,000 and, if any Fixed Rate Loans would otherwise be in a
lesser principal amount for any period, such Loans shall be Base
Rate Loans during such period.
4.05 Certain Notices. Notices by the Company to the
Agent of borrowings, Conversions, Continuations and optional
prepayments of Loans, of Types of Loans and of the duration of
Interest Periods shall be irrevocable and shall be effective only
if received by the Agent not later than 10:00 a.m. Dallas time on
the number of Business Days prior to the date of the relevant
borrowing, Conversion, Continuation or prepayment or the first
day of such Interest Period specified below:
<PAGE> 20
Number of
Business
Notice Days Prior
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, CD Loans 2
Each such notice of borrowing, Conversion, Continuation or
optional prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to
Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid (and, in the case of a
Conversion, the Type of Loan to result from such Conversion) and
the date of borrowing, Conversion, Continuation or optional
prepayment (which shall be a Business Day). Each such notice of
the duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. The Agent shall
promptly notify the Banks of the contents of each such notice.
In the event that the Company fails to select the Type of Loan,
or the duration of any Interest Period for any Fixed Rate Loan,
within the time period and otherwise as provided in this
Section 4.05 (or as the Agent may otherwise agree), such Loan (if
outstanding as a Fixed Rate Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current
Interest Period for such Loan or (if outstanding as a Base Rate
Loan) will remain as, or (if not then outstanding) will be made
as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Bank or the Company (in
either case, a "Payor") prior to the date on which the Payor is
to make payment to the Agent of (in the case of a Bank) the
proceeds of a Loan to be made by such Bank hereunder or (in the
case of the Company) a payment to the Agent for account of one or
more of the Banks hereunder (such payment being herein called the
"Required Payment"), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available
<PAGE> 21
to the intended recipient(s) on such date; and, if the Payor has
not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent
the amount so made available together with interest thereon in
respect of each day during the period commencing on the date (the
"Advance Date") such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such day and, if such
recipient(s) shall fail promptly to make such payment, the Agent
shall be entitled to recover such amount, on demand, from the
Payor, together with interest as aforesaid, provided that if
neither the recipient(s) nor the Payor shall return the Required
Payment to the Agent within three Business Days of the Advance
Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the
Required Payment as follows:
(i) if the Required Payment shall represent a payment
to be made by the Company to the Banks, the Company and the
recipient(s) shall each be obligated retroactively to the
Advance Date to pay interest in respect of the Required
Payment at the Post-Default Rate (without duplication of the
obligation of the Company under Section 3.02 hereof to pay
interest on the Required Payment at the Post-Default Rate),
it being understood that the return by the recipient(s) of
the Required Payment to the Agent shall not limit such
obligation of the Company under said Section 3.02 to pay
interest at the Post-Default Rate in respect of the Required
Payment and
(ii) if the Required Payment shall represent proceeds
of a Loan to be made by the Banks to the Company, the Payor
and the Company shall each be obligated retroactively to the
Advance Date to pay interest in respect of the Required
Payment pursuant to Section 3.02 hereof, it being understood
that the return by the Company of the Required Payment to
the Agent shall not limit any claim the Company may have
against the Payor in respect of such Required Payment.
4.07 Sharing of Payments.
(a) If any Bank shall obtain from either Obligor
payment of any principal of or interest on any Loan owing to it
or payment of any other amount under this Agreement through the
exercise of any right of set-off, banker's lien or counterclaim
or similar right or otherwise (other than from the Agent as
provided herein), and, as a result of such payment, such Bank
shall have received a greater percentage of the principal of or
interest on the Loans or such other amounts then due hereunder by
such Obligor to such Bank than the percentage received by any
other Bank, it shall promptly purchase from such other Banks
<PAGE> 22
participations in (or, if and to the extent specified by such
Bank, direct interests in) the Loans or such other amounts,
respectively, owing to such other Banks (or in interest due
thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end
that all the Banks shall share the benefit of such excess payment
(net of any expenses that may be incurred by such Bank in
obtaining or preserving such excess payment) pro rata in
accordance with the unpaid principal of and/or interest on the
Loans or such other amounts, respectively, owing to each of the
Banks. To such end all the Banks shall make appropriate
adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise
be restored.
(b) The Company agrees that any Bank so purchasing
such a participation (or direct interest) may exercise all rights
of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Bank were a
direct holder of Loans or other amounts (as the case may be)
owing to such Bank in the amount of such participation.
(c) Nothing contained herein shall require any Bank to
exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of either
Obligor. If, under any applicable bankruptcy, insolvency or
other similar law, any Bank receives a secured claim in lieu of a
set-off to which this Section 4.07 applies, such Bank shall, to
the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Banks
entitled under this Section 4.07 to share in the benefits of any
recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from
time to time such amounts as are necessary to compensate such
Bank for any actual costs that are attributable to its making or
maintaining of any Fixed Rate Loans or its obligation to make any
Fixed Rate Loans hereunder, or any reduction in any amount
receivable by such Bank hereunder in respect of any of such Loans
or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change that:
(i) shall subject any Bank (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other
charge in respect of such Loans or its Note or changes the
<PAGE> 23
basis of taxation of any amounts payable to such Bank under
this Agreement or its Note in respect of any of such Loans
(excluding changes in the rate of tax on the overall net
income of such Bank or of such Applicable Lending Office by
the jurisdiction in which such Bank has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit
or similar requirements (other than the Reserve Requirement
utilized in the determination of the Fixed Rate for CD Loans
or, in the case of any Bank for any period as to which the
Company is required to pay any amount under paragraph (d)
below, the reserves against "Eurocurrency liabilities" under
Regulation D therein referred to) relating to any extensions
of credit or other assets of, or any deposits with or other
liabilities of, such Bank (including, without limitation,
any of such Loans or any deposits referred to in the
definition of "Fixed Base Rate" in Section 1.01 hereof), or
any commitment of such Bank (including, without limitation,
the Commitment of such Bank hereunder); or
(iii) imposes any other condition affecting this
Agreement or its Note (or any of such extensions of credit
or liabilities) or its Commitment.
If any Bank requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Bank (with a
copy to the Agent), suspend the obligation of such Bank
thereafter to make or Continue Loans of the Type with respect to
which such compensation is requested, or to Convert Loans of any
other Type into Loans of such Type, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case
the provisions of Section 5.04 hereof shall be applicable),
provided that such suspension shall not affect the right of such
Bank to receive the compensation so requested.
(b) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Bank from time to time on
request such additional amounts as are necessary to compensate
such Bank (or, without duplication, the bank holding company of
which such Bank is a subsidiary) for any actual costs that are
attributable to the maintenance by such Bank (or any Applicable
Lending Office or such bank holding company), pursuant to any
Regulatory Change, of capital in respect of its Commitment or
Loans (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or
equity of such Bank (or any Applicable Lending Office or such
bank holding company) to a level below that which such Bank (or
any Applicable Lending Office or such bank holding company) could
have achieved but for such law, regulation, interpretation,
directive or request).
<PAGE> 24
(c) Each Bank shall notify the Company of any event
occurring after the date hereof entitling such Bank to
compensation under paragraph (a) or (b) of this Section 5.01 as
promptly as practicable, but in any event within 45 days, after
such Bank obtains actual knowledge thereof; provided that (i) if
any Bank fails to give such notice within 45 days after it
obtains actual knowledge of such an event, such Bank shall, with
respect to compensation payable pursuant to this Section 5.01 in
respect of any costs resulting from such event, only be entitled
to payment under this Section 5.01 for costs incurred from and
after the date 45 days prior to the date that such Bank does give
such notice and (ii) each Bank will use its best efforts to avoid
the need for, or reduce the amount of, such compensation. Each
Bank will furnish to the Company a certificate setting forth the
basis and amount of each request by such Bank for compensation
under paragraph (a) or (b) of this Section 5.01, which
certificate shall be conclusive absent manifest error.
(d) Without limiting the effect of the foregoing, the
Company shall pay to each Bank on the last day of each Interest
Period so long as such Bank is maintaining reserves against
"Eurocurrency liabilities" under Regulation D (or so long as such
Bank is, by reason of any Regulatory Change, maintaining reserves
against any other category of liabilities that includes deposits
by reference to which the interest rate on Eurodollar Loans is
determined as provided in this Agreement or against any category
of extensions of credit or other assets of such Bank that
includes any Eurodollar Loans) an additional amount (determined
by such Bank and notified to the Company through the Agent) equal
to the product of the following for each Eurodollar Loan for each
day during such Interest Period:
(i) the principal amount of such Eurodollar Loan
outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest
accrues on such Eurodollar Loan for such Interest Period as
provided in this Agreement (less the Applicable Margin) and
the denominator of which is one minus the effective rate
(expressed as a decimal) at which such reserve requirements
are imposed on such Bank on such day minus (y) such
numerator; and
(iii) 1/360.
5.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, on or prior to the
determination of any Fixed Base Rate for any Interest Period:
<PAGE> 25
(a) the Agent reasonably determines that quotations of
interest rates for the relevant deposits referred to in the
definition of "Fixed Base Rate" in Section 1.01 hereof are
not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of
interest for either Type of Fixed Rate Loans as provided
herein; or
(b) the Majority Banks reasonably determine, and
notify the Agent, that the relevant rates of interest
referred to in the definition of "Fixed Base Rate" in
Section 1.01 hereof upon the basis of which the rate of
interest for Eurodollar Loans or CD Loans for such Interest
Period is to be determined are not likely to be adequate to
cover the cost to such Banks of making or maintaining such
Type of Loans for such Interest Period;
then the Agent shall give the Company and each Bank notice
thereof promptly (and, in any event, no later that the third
Business Day after the occurrence thereof) and, so long as such
condition remains in effect, the Banks shall be under no
obligation to make additional Loans of such Type, to Continue
Loans of such Type or to Convert Loans of any other Type into
Loans of such Type, and the Company shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Loans of
such Type, either prepay such Loans or Convert such Loans into
another Type of Loan in accordance with Section 2.06 hereof.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Bank or its Applicable Lending Office to honor its obligation to
make or maintain Eurodollar Loans hereunder (and the designation
of a different Applicable Lending Office would either not avoid
such unlawfulness or would be materially disadvantageous to such
Bank), then such Bank shall promptly notify the Company thereof
(with a copy to the Agent) and such Bank's obligation to make or
Continue, or to Convert Loans of any other Type into, Eurodollar
Loans shall be suspended until such time as such Bank may again
make and maintain Eurodollar Loans (in which case the provisions
of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation
of any Bank to make a particular Type of Fixed Rate Loans or to
Continue, or to Convert Loans of any other Type into, Loans of a
particular Type shall be suspended pursuant to Section 5.01
or 5.03 hereof (Loans of such Type being herein called "Affected
Loans" and such Type being herein called the "Affected Type"),
such Bank's Affected Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest
Period(s) for Affected Loans (or, in the case of a Conversion
required by Section 5.03 hereof, on such earlier date as such
Bank may specify to the Company with a copy to the Agent) and,
<PAGE> 26
unless and until such Bank gives notice as provided below that
the circumstances specified in Section 5.01 or 5.03 hereof that
gave rise to such Conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have
been so Converted, all payments and prepayments of principal
that would otherwise be applied to such Bank's Affected
Loans shall be applied instead to its Base Rate Loans;
(b) all Loans that would otherwise be made or
Continued by such Bank as Loans of the Affected Type shall
be made or Continued instead as Base Rate Loans, and all
Loans of such Bank that would otherwise be Converted into
Loans of the Affected Type shall be Converted instead into
(or shall remain as) Base Rate Loans; and
(c) if Loans of other Banks of the Affected Type are
subsequently Converted into Loans of another Type (other
than Base Rate Loans), such Bank's Base Rate Loans shall be
automatically Converted on the Conversion date for such
Loans of the other Banks into Loans of such other Type to
the extent necessary so that, after giving effect thereto,
all Loans held by such Bank and the Banks whose Loans are so
Converted are held pro rata (as to principal amounts, Types
and Interest Periods) in accordance with their respective
Commitments.
If such Bank gives notice to the Company with a copy to the Agent
that the circumstances specified in Section 5.01 or 5.03 hereof
that gave rise to the Conversion of such Bank's Affected Loans
pursuant to this Section 5.04 no longer exist (which such Bank
agrees to do promptly upon such circumstances ceasing to exist)
at a time when Loans of the Affected Type made by other Banks are
outstanding, such Bank's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Loans of the Affected Type, to the
extent necessary so that, after giving effect thereto, all Loans
held by the Banks holding Loans of the Affected Type and by such
Bank are held pro rata (as to principal amounts, Types and
Interest Periods) in accordance with their respective
Commitments.
5.05 Compensation. The Company shall pay to the Agent
for account of each Bank, upon the request of such Bank through
the Agent, such amount or amounts as shall be sufficient to
compensate it for any actual loss, cost or expense (excluding
loss of profit) that is attributable to:
(a) any payment, prepayment or Conversion of a Fixed
Rate Loan made by such Bank for any reason (including,
<PAGE> 27
without limitation, the acceleration of the Loans pursuant
to Section 10 hereof) on a date other than the last day of
the Interest Period for such Loan; or
(b) any failure by the Company for any reason
(including, without limitation, the failure of any of the
conditions precedent specified in Section 7 hereof to be
satisfied) to borrow a Fixed Rate Loan from such Bank on the
date for such borrowing specified in the relevant notice of
borrowing given pursuant to Section 2.02 hereof.
5.06 U.S. Taxes.
(a) The Company agrees to pay to each Bank that is not
a U.S. Person such additional amounts as are necessary in
order that the net payment of any amount due to such
non-U.S. Person hereunder after deduction for or withholding
in respect of any U.S. Taxes imposed with respect to such
payment (or in lieu thereof, payment of such U.S. Taxes by
such non-U.S. Person), will not be less than the amount
stated herein to be then due and payable, provided that the
foregoing obligation to pay such additional amounts shall
not apply:
(i) to any payment to any Bank hereunder unless
such Bank is, on the date hereof (or on the date it
becomes a Bank hereunder as provided in
Section 12.06(b) hereof) and on the date of any change
in the Applicable Lending Office of such Bank, either
entitled to submit a Form 1001 (relating to such Bank
and entitling it to a complete exemption from
withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224
(relating to all interest to be received by such Bank
hereunder in respect of the Loans),
(ii) to any U.S. Taxes imposed solely by reason
of the failure by such non-U.S. Person (or, if such
non-U.S. Person is not the beneficial owner of the
relevant Loan, such beneficial owner) to comply with
applicable certification, information, documentation or
other reporting requirements concerning the
nationality, residence, identity or connections with
the United States of America of such non-U.S. Person
(or beneficial owner, as the case may be) if such
compliance is required by statute or regulation of the
United States of America as a precondition to relief or
exemption from such U.S. Taxes.
For the purposes of this Section 5.06(a), (A) "Form 1001" shall
mean Form 1001 (Ownership, Exemption, or Reduced Rate
Certificate) of the Department of the Treasury of the United
States of America, and (B) "Form 4224" shall mean Form 4224
<PAGE> 28
(Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of
America (or in relation to either such Form such successor and
related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a
claim to which such Form relates).
(b) Within 30 days after paying any amount to the
Agent or any Bank from which it is required by law to make
any deduction or withholding, and within 30 days after it is
required by law to remit such deduction or withholding to
any relevant taxing or other authority, the Company shall
deliver to the Agent for delivery to such non-U.S. Person
evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
5.07 Replacement of Banks. If any Bank requests
compensation pursuant to Section 5.01, 5.05 or 5.06 hereof, or
any Bank's obligation to make or Continue, or to Convert Loans of
any Type into, any other Type of Loan shall be suspended pursuant
to Section 5.01 or 5.03 hereof (any such Bank requesting such
compensation, or whose obligations are so suspended, being herein
called a "Requesting Bank"), the Company, upon three Business
Days' notice, may require that such Requesting Bank transfer all
of its right, title and interest under this Agreement and such
Requesting Bank's Notes, if any, to any bank or other financial
institution identified by the Company that is satisfactory to the
Agent (i) if such bank or other financial institution (a
"Proposed Bank") agrees to assume all of the obligations of such
Requesting Bank hereunder, and to purchase all of such Requesting
Bank's Loans hereunder for consideration equal to the aggregate
outstanding principal amount of such Requesting Bank's Loans,
together with interest thereon to the date of such purchase, and
satisfactory arrangements are made for payment to such Requesting
Bank of all other amounts payable hereunder to such Requesting
Bank on or prior to the date of such transfer (including any fees
accrued hereunder and any amounts that would be payable under
Section 5.05 hereof as if all of such Requesting Bank's Loans
were being prepaid in full on such date) and (ii) if such
Requesting Bank has requested compensation pursuant to
Section 5.01 or 5.06 hereof, such Proposed Bank's aggregate
requested compensation, if any, pursuant to said Section 5.01
or 5.06 with respect to such Requesting Bank's Loans is lower
than that of the Requesting Bank. Subject to the provisions of
Section 12.06(b) hereof, such Proposed Bank shall be a "Bank" for
all purposes hereunder. Without prejudice to the survival of any
other agreement of the Company hereunder, the agreements of the
Company contained in Sections 5.01, 5.05, 5.06 and 12.03 (without
duplication of any payments made to such Requesting Bank by the
<PAGE> 29
Company or the Proposed Bank) shall survive for the benefit of
such Requesting Bank under this Section 5.07 with respect to the
time prior to such replacement.
Section 6. Guarantee.
6.01 The Guarantee. The Guarantor hereby guarantees
to each Bank and the Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and
interest (at the applicable rate, whether the Post-Default Rate
or otherwise, and including post-petition interest, whether or
not allowed under any bankruptcy, insolvency or other similar
law) on the Loans made by the Banks to, and the Note held by each
Bank of, the Company under this Agreement and under the Notes,
strictly in accordance with the terms thereof (such obligations
being herein collectively called the "Guaranteed Obligations").
The Guarantor hereby further agrees that if the Company shall
fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the
Guarantor will promptly pay the same, without any demand or
notice whatsoever (except as provided in the following sentence),
and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such
extension or renewal. The Guarantor shall not be required to pay
any Guaranteed Obligations until the third Business Day following
its receipt of notice from the Agent of the Company's failure to
pay the same. The Guarantor hereby agrees to pay on demand all
reasonable attorneys' fees and all other reasonable costs and
expenses incurred by the Agent and the Banks in connection with
the enforcement or collection of this Section 6.
6.02 Obligations Unconditional. The obligations of
the Guarantor under Section 6.01 hereof are absolute and
unconditional irrespective of the value, genuineness, validity,
regularity or enforceability of the obligations of the Company
under this Agreement, the Notes or any other agreement or
instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, it
being the intent of this Section 6.02 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any
and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of
the following shall not alter or impair the liability of the
Guarantor hereunder which shall remain absolute and unconditional
as described above:
<PAGE> 30
(i) at any time or from time to time, without notice
to the Guarantor, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of this Agreement or the Notes or any other
agreement or instrument referred to herein or therein shall
be done or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed
Obligations shall be modified, supplemented or amended in
any respect, or any right under this Agreement or the Notes
or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt
with; or
(iv) the taking or accepting of collateral as security
for the Guaranteed Obligations or if any lien or security
interest granted to, or in favor of, the Agent or any Bank
or Banks as security for any of the Guaranteed Obligations
shall fail to be perfected; or
(v) any other circumstance which might otherwise
constitute a defense available to or discharge of, the
Company or Guarantor.
The Guarantor hereby expressly waives diligence, presentment,
demand of payment, notice of intent to accelerate, notice of
acceleration, protest and all other notices whatsoever (other
than as provided in the last sentence of Section 6.01), and any
requirement that the Agent or any Bank exhaust any right, power
or remedy or proceed against the Company under this Agreement or
the Notes or any other agreement or instrument referred to herein
or therein, or against any other Person under any other guarantee
of, or security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The obligations of the Guarantor
under this Section 6 shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of the
Company in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise and the Guarantor agrees that it
will indemnify the Agent and each Bank on demand for all
reasonable costs and expenses (including, without limitation,
fees of counsel) incurred by the Agent or such Bank in connection
with such rescission or restoration, including any such costs and
<PAGE> 31
expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
6.04 Subrogation. The Guarantor hereby agrees that
until the payment and satisfaction in full of all Guaranteed
Obligations and the expiration and termination of the Commitments
of the Banks under this Agreement it shall not exercise any right
or remedy arising by reason of any performance by it of its
guarantee in Section 6.01 hereof, whether by subrogation or
otherwise, against the Company or any other guarantor of any of
the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.
6.05 Remedies. The Guarantor agrees that, as between
the Guarantor and the Banks, the obligations of the Company under
this Agreement and the Notes may be declared to be forthwith due
and payable as provided in Section 10 hereof (and shall be deemed
to have become automatically due and payable in the circumstances
provided in said Section 10) for purposes of Section 6.01 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that,
in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall
forthwith become due and payable by the Guarantor for purposes of
said Section 6.01.
6.06 Continuing Guarantee. The guarantee in this
Section 6 is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
Section 7. Conditions Precedent.
7.01 Conditions for Making Loans. The obligation of
any Bank to make its Loan hereunder is subject to the conditions
precedent that the Agent shall have received the following
documents (with, in the case of clauses (a), (b), (c) and (d)
below, sufficient copies for each Bank), each of which shall be
satisfactory to the Agent (and to the extent specified below, to
each Bank) in form and substance:
(a) Corporate Documents. A certificate of existence
from the Office of the Secretary of State of the State of
Texas and a certificate of good standing from the Texas
Comptroller of Public Accounts in respect of the Company,
and a certificate of existence and good standing from the
office of the Secretary of State of the State of Delaware in
respect of the Guarantor, and certified copies of the
<PAGE> 32
charter and by-laws (or equivalent documents) of each
Obligor and of all corporate authority for each Obligor
(including, without limitation, board of director
resolutions and evidence of the incumbency, including
specimen signatures, of officers) with respect to the
execution, delivery and performance of such of this
Agreement and the Notes to which such Obligor is intended to
be a party and each other document to be delivered by such
Obligor from time to time in connection herewith and the
Loans hereunder (and the Agent and each Bank may
conclusively rely on such certificate until it receives
notice in writing from such Obligor to the contrary).
(b) Officer's Certificate. A certificate of a senior
officer of the Company, dated the Closing Date, to the
effect set forth in clauses (a) and (b) of the last
paragraph of this Section 7.
(c) Opinion of Special Counsel to the Obligors. An
opinion, dated the Closing Date, of Milbank, Tweed, Hadley &
McCloy, special counsel to the Obligors, substantially in
the form of Exhibit B hereto.
(d) Opinion of Special Texas Counsel to the Obligors.
An opinion, dated the Closing Date, of Vinson & Elkins
L.L.P., special Texas counsel to the Obligors, substantially
in the form of Exhibit C hereto.
(e) Notes. The Notes, duly completed and executed for
each Bank.
(f) Evidence of Regulatory Approval. Evidence that
all necessary governmental and regulatory approvals required
in connection with the Loans have been obtained, including,
without limitation, approval of the Securities and Exchange
Commission.
7.02 Additional Conditions. The obligation of any
Bank to make its Loan hereunder is subject to the further
conditions precedent that, both immediately prior to the making
of such Loan and also after giving effect thereto and to the
intended use thereof:
(a) no Default shall have occurred and be continuing;
and
(b) the representations and warranties made by the
Company and the Guarantor in Section 8 hereof shall be true
and complete on and as of the date of the making of such
Loan with the same force and effect as if made on and as of
<PAGE> 33
such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as
of such specific date).
Section 8. Representations and Warranties. Each of
the Company and the Guarantor represents and warrants to the
Agent and the Banks that:
8.01 Corporate Existence. Each of the Company and the
Guarantor: (a) is a corporation, partnership or other entity
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization; (b) has all
requisite corporate or other power, and has all material
governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (c) is qualified to do
business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could
(either individually or in the aggregate) have a Material Adverse
Effect.
8.02 Financial Condition. The quarterly report of the
Guarantor and its Subsidiaries filed with the Securities and
Exchange Commission on Form 10-Q for the third calendar quarter
of 1994 and the annual report on Form 10-K for the calendar year
1993, heretofore delivered to the Agent, fairly present the
financial condition of the Guarantor and its Subsidiaries and the
results of their operations and transactions in their surplus
accounts as of the dates and for the periods referred to and have
been prepared in accordance with GAAP consistently maintained by
the Guarantor throughout the periods involved. There are no
liabilities, direct or indirect, fixed or contingent, of the
Guarantor or its Subsidiaries as of the dates of such Forms 10-K
and 10-Q which are required under GAAP to be reflected therein or
in the notes thereto which are not so reflected. There has been
no material adverse change in the business, properties, condition
(financial or other) or operations, present or prospective, of
the Guarantor and its Subsidiaries taken as a whole since
September 30, 1994.
8.03 Litigation. Except as disclosed in the quarterly
and annual reports referred to in Section 8.02 hereof, there are
no legal or arbitral proceedings, or any proceedings by or before
any governmental or regulatory authority or agency, now pending
or (to the knowledge of the Guarantor) threatened against the
Guarantor or any of its Subsidiaries that, if adversely
determined could (either individually or in the aggregate) have a
Material Adverse Effect.
<PAGE> 34
8.04 No Breach. None of the execution and delivery of
this Agreement and the Notes, the consummation of the
transactions herein contemplated or compliance with the terms and
provisions hereof will contravene or result in a breach of, or
require any consent under, the charter or by-laws of either
Obligor, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which either Obligor is
a party or by which any of them or any of their property is bound
or to which any of them is subject, or constitute a default under
any such agreement or instrument.
8.05 Action. Each Obligor has all necessary corporate
power, authority and legal right to execute, deliver and perform
its obligations under this Agreement and, in the case of the
Company, the Notes; the execution, delivery and performance by
each Obligor of this Agreement, and by the Company of the Notes,
have been duly authorized by all necessary corporate action on
its part (including, without limitation, any required shareholder
approvals); and this Agreement has been duly and validly executed
and delivered by each Obligor and constitutes, and each of the
Notes when executed and delivered by the Company for value will
constitute, its legal, valid and binding obligation, enforceable
against each Obligor party thereto in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
8.06 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency, or any securities
exchange, other than those already made or obtained, are
necessary for the execution, delivery or performance by either
Obligor of this Agreement or the Notes to which it is a party or
for the legality, validity or enforceability hereof.
8.07 Margin Securities. The Company is not engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations G, T, U,
or X of the Board of Governors of the Federal Reserve System),
and no part of the proceeds of any extension of credit under this
Agreement will be used to purchase or carry any such margin stock
or to extend credit to others for the purpose of purchasing or
carrying margin stock.
<PAGE> 35
8.08 Disclosure. No statement, report, certification,
representation or warranty made by the Company or the Guarantor
in this Agreement or in any other Loan Document or furnished to
the Agent or any Bank in connection with this Agreement or any
transaction contemplated hereby contains any untrue statement of
a material fact.
Section 9. Covenants of the Company and the Guarantor.
Each of Company and the Guarantor covenants and agrees with the
Banks and the Agent that, so long as any Commitment or Loan is
outstanding and until payment in full of all amounts payable by
the Company hereunder:
9.01 Financial Statements Etc. The Guarantor and/or
the Company, as the case may be, shall deliver to each of the
Banks:
(a) as soon as available and in any event within 60
days after the end of the first three fiscal quarters of the
Guarantor, the quarterly report of the Guarantor and its
Subsidiaries filed with the Securities and Exchange
Commission on Form 10-Q for such quarter;
(b) as soon as available and in any event within 120
days after the end of each fiscal year of the Guarantor, the
annual report of the Guarantor and its Subsidiaries filed
with the Securities and Exchange Commission on Form 10-K for
such year;
(c) as soon as available, Form U-13-60 Annual Report of
the Company and Form U5S Annual Report of the Guarantor,
each as filed each year with the Securities and Exchange
Commission; provided that if delivery of such reports to the
Securities and Exchange Commission shall no longer be
required under the Public Utility Holding Company Act of
1935, as amended, then such other comparable reports in a
format and at such times as shall be agreed upon by the
Guarantor or the Company, as the case may be, and the Agent;
(d) as soon as possible, and in any event within ten
days after the Guarantor knows or has reason to believe that
any of the events or conditions specified below with respect
to any Plan or Multiemployer Plan has occurred or exists and
which could reasonably be expected to have a Material
Adverse Effect, a statement signed by a senior financial
officer of the Guarantor setting forth details respecting
such event or condition and the action, if any, that the
Guarantor or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required
to be filed with or given to the PBGC by the Guarantor or an
ERISA Affiliate with respect to such event or condition):
<PAGE> 36
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which the
PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on
or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA,
shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the
Code); and any request for a waiver under
Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA
of a notice of intent to terminate any Plan or any
action taken by the Guarantor or an ERISA Affiliate to
terminate any Plan;
(iii) the institution by the PBGC of proceedings
under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan,
or the receipt by the Guarantor or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Guarantor or any ERISA
Affiliate that results in liability under Section 4201
or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default)
or the receipt by the Guarantor or any ERISA Affiliate
of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the
Guarantor or any ERISA Affiliate to enforce Section 515
of ERISA, which proceeding is not dismissed within 30
days; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a
<PAGE> 37
part if the Guarantor or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with
the provisions of said Sections;
(e) promptly after the Company or the Guarantor knows
that any Default has occurred, a notice of such Default
describing the same in reasonable detail and, together with
such notice or as soon thereafter as possible, a description
of the action that the Company or the Guarantor, as the case
may be, has taken or proposes to take with respect thereto;
(f) not later than ten Business Days after receiving
written notice thereof from any Rating Agency, a notice of
any change in the rating by such Rating Agency of the
commercial paper issued by the Guarantor; and
(g) from time to time such other information regarding
the financial condition, operations, business or prospects
of the Guarantor or any of its Subsidiaries (including,
without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under
ERISA) as any Bank or the Agent may reasonably request.
9.02 Notice of Material Events. The Guarantor will
promptly give to each Bank copies of each report of the Guarantor
and its Subsidiaries filed with the Securities and Exchange
Commission on Form 8-K.
9.03 Existence, Etc. Each of the Company and the
Guarantor will:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(provided that nothing in this Section 9.03 shall prohibit
any transaction expressly permitted under Section 9.05
hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements could (either individually or in the aggregate)
have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the
date on which penalties attach thereto, except for any such
tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings
being diligently pursued and against which adequate reserves
are being maintained in accordance with GAAP;
<PAGE> 38
(d) maintain all of its properties used or useful in
its business in good working order and condition, ordinary
wear and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP
consistently applied; and
(f) permit representatives of any Bank or the Agent,
during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its
properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such
Bank or the Agent (as the case may be).
9.04 Insurance. The Guarantor will maintain, and will
cause its Subsidiaries to maintain, insurance with financially
sound and reputable insurance companies, and with respect to
property and risks of a character usually maintained by
corporations engaged in the same or similar business similarly
situated, against loss, damage and liability of the kinds and in
the amounts customarily maintained by such corporations.
9.05 Prohibition of Fundamental Changes. Neither the
Company nor the Guarantor shall:
(a) enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution);
or
(b) convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or
substantially all of its business or property.
Notwithstanding the foregoing provisions of this Section 9.05,
either Obligor may merge or consolidate with any other Person if
such Obligor is the surviving corporation or the surviving
corporation assumes the liabilities of such Obligor by operation
of law or otherwise.
9.06 Ownership of the Company. The Guarantor will at
all times cause the Company to be a Wholly Owned Subsidiary of
the Guarantor.
9.07 Compliance with ERISA. Neither the Company nor
the Guarantor shall take any action with respect to any Plan or
Multiemployer Plan which results in an event or condition
specified in Section 9.01(d) hereof if, taken together with all
other such events or conditions, either Obligor or any ERISA
Affiliate would be reasonably likely to incur a liability to a
<PAGE> 39
Plan, a Multiemployer Plan or the PBGC (or any combination of the
foregoing) that would (either individually or in the aggregate)
have a Material Adverse Effect.
9.08 Line of Business. The Company shall not engage
in a substantial respect in any line of business that is
materially different from the business in which it is engaged on
the date hereof.
9.09 Consolidated Net Worth. The Guarantor shall not
permit the consolidated net worth of the Guarantor and its
Subsidiaries, calculated on a consolidated basis in accordance
with GAAP, to be less than $2,000,000,000 at any time.
Section 10. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) The Company shall: (i) default in the payment of
any principal of any Loan when due (whether at stated
maturity or at mandatory or optional prepayment); or
(ii) default in the payment of any interest on any Loan when
due and such default shall have continued unremedied for
more than ten Business Days; or (iii) default in the payment
of any of the other Obligations when due and such default
shall have continued unremedied for more than ten Business
Days after receipt of written notice thereof to the Company
by the Agent or any Bank; or
(b) Either Obligor shall default in the payment when
due of any principal of or interest on any of its other
indebtedness exceeding $25,000,000 in aggregate amount and,
in the case of interest, such default shall have continued
unremedied for more than ten Business Days; or the holder or
holders (or a trustee or agent on behalf of such holder or
holders) of indebtedness of either Obligor exceeding
$25,000,000 in aggregate principal amount shall have caused
such indebtedness to become due or to be prepaid in full
(whether by redemption, purchase, offer to purchase or
otherwise) prior to its stated maturity; or
(c) Any material representation, warranty or
certification made or deemed made herein (or in any
modification or supplement hereto) by any Obligor, or any
certificate furnished to any Bank or the Agent pursuant to
the provisions hereof, shall prove to have been incorrect as
of the time made or furnished in any material, adverse
respect and such incorrectness remains material and adverse
at the time in question and has not been cured; or
<PAGE> 40
(d) Either Obligor shall materially default in the
performance of any of its other obligations in this
Agreement and such default shall continue unremedied for a
period of 30 or more days after receipt of written notice
thereof to the Company by the Agent or any Bank; or
(e) The Guarantor or the Company shall (i) apply for
or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or
liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of
its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code
or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(f) A proceeding or case shall be commenced, without
the application or consent of the affected Obligor, in any
court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or
winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of such Obligor or of all
or any substantial part of its property or (iii) similar
relief in respect of such Obligor under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of
60 or more days; or an order for relief against any Obligor
shall be entered in an involuntary case under the Bankruptcy
Code; or
(g) Final judgment(s) for the payment of an amount in
excess of $25,000,000 in the aggregate shall be rendered
against the Guarantor by one or more courts of competent
jurisdiction and shall not be discharged or stayed for a
period of at least 30 days;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (e) or (f) of this Section 10 with respect
to either Obligor, the Agent may and, upon request of the
Majority Banks, will, by notice to the Company (which notice
shall not be effective unless the Agent shall have given the
<PAGE> 41
Company at least three Business Days' prior notice of its intent
to deliver such notice), terminate the Commitments and/or declare
the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by the
Obligors hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 hereof) to be
forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, notice,
notice of intent to accelerate, notice of acceleration, protest
or other formalities of any kind, all of which are hereby
expressly waived by each Obligor; and (2) in the case of the
occurrence of an Event of Default referred to in clause (e)
or (f) of this Section 10 with respect to either Obligor, the
Commitments shall automatically be terminated and the principal
amount then outstanding of, and the accrued interest on, the
Loans and all other amounts payable by the Obligors hereunder and
under the Notes (including, without limitation, any amounts
payable under Section 5.05 hereof) shall automatically become
immediately due and payable without presentment, demand, notice,
notice of intent to accelerate, notice of acceleration, protest
or other formalities of any kind, all of which are hereby
expressly waived by each Obligor.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. Each Bank hereby
appoints and authorizes the Agent to act as its agent hereunder
with such powers as are specifically delegated to the Agent by
the terms of this Agreement, together with such other powers as
are reasonably incidental thereto. The Agent (which term as used
in this sentence and in Section 11.05 and the first sentence of
Section 11.06 hereof shall include reference to its affiliates
and its own and its affiliates' officers, directors, employees
and agents):
(a) shall have no duties or responsibilities except
those expressly set forth in this Agreement, and shall not
by reason of this Agreement be a trustee for any Bank;
(b) shall not be responsible to the Banks for any
recitals, statements, representations or warranties
contained in this Agreement, or in any certificate or other
document referred to or provided for in, or received by any
of them under, this Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of
this Agreement, any Note or any other document referred to
or provided for herein or for any failure by the Company or
any other Person to perform any of its obligations hereunder
or thereunder;
<PAGE> 42
(c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder; and
(d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other
document or instrument referred to or provided for herein or
in connection herewith, except for its own gross negligence
or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it in good faith. The
Agent may deem and treat the payee of a Note as the holder
thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed with the
Agent, together with the consent of the Company to such
assignment or transfer (to the extent provided in
Section 12.06(b) hereof).
11.02 Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone,
telecopy, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by
the Agent. As to any matters not expressly provided for by this
Agreement, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance
with instructions given by the Majority Banks, and such
instructions of the Majority Banks and any action taken or
failure to act pursuant thereto shall be binding on all of the
Banks.
11.03 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the
Agent has received notice from a Bank or the Company specifying
such Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of
the occurrence of a Default, the Agent shall give prompt notice
thereof to the Banks. The Agent shall (subject to Section 11.07
hereof) take such action with respect to such Default as shall be
directed by the Majority Banks, provided that, unless and until
the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem
advisable in the best interest of the Banks except to the extent
that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization
of the Majority Banks or all of the Banks.
<PAGE> 43
11.04 Rights as a Bank. With respect to its
Commitment and the Loans made by it, FITX (and any successor
acting as Agent) in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not acting as the Agent, and
the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. FITX
(and any successor acting as Agent) and its affiliates may
(without having to account therefor to any Bank) accept deposits
from, lend money to, make investments in and generally engage in
any kind of banking, trust or other business with the Obligors
(and any of their Subsidiaries or affiliates) as if it were not
acting as the Agent, and FITX (and any such successor) and its
affiliates may accept fees and other consideration from the
Obligors for services in connection with this Agreement or
otherwise without having to account for the same to the Banks.
11.05 Indemnification. The Banks agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03
hereof, but without limiting the obligations of the Company under
said Section 12.03) ratably in accordance with the aggregate
principal amount of the Loans held by the Banks (or, if no Loans
are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted
against the Agent (including by any Bank) arising out of or by
reason of any investigation in or in any way relating to or
arising out of this Agreement or any other documents contemplated
by or referred to herein or the transactions contemplated hereby
(including, without limitation, the costs and expenses that the
Company is obligated to pay under Section 12.03 hereof but
excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of
any of the terms hereof or of any such other documents, provided
that although the Agent shall be indemnified for ordinary
negligence, no Bank shall be liable for any of the foregoing to
the extent they arise solely from the gross negligence or willful
misconduct of the party to be indemnified.
11.06 Non-Reliance on Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on
the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Guarantor and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own analysis and decisions in
<PAGE> 44
taking or not taking action under this Agreement. The Agent
shall not be required to keep itself informed as to the
performance or observance by either Obligor of this Agreement or
any other document referred to or provided for herein or to
inspect the properties or books of the Guarantor or any of its
Subsidiaries. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks
by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or
business of the Guarantor or any of its Subsidiaries (or any of
their affiliates) that may come into the possession of the Agent
or any of its affiliates.
11.07 Failure to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it
shall receive further assurances to its satisfaction from the
Banks of their indemnification obligations under Section 11.05
hereof against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such
action.
11.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof
to the Banks and the Company and the Guarantor, and the Agent may
be removed at any time with or without cause by the Company or
the Majority Banks. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint a successor Agent
approved by the Company. If no successor Agent shall have been
so appointed by the Majority Banks and shall have accepted such
appointment within 30 days after the retiring Agent's giving of
notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent approved by the Company. Upon
the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon 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
retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Section 11 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Agent or
any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this
<PAGE> 45
Agreement or any Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
12.02 Notices. All notices, requests and other
communications provided for herein (including, without
limitation, any modifications of, or waivers, requests or
consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof; or, as to any party, at
such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case
given or addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees (a) to pay or
reimburse the Agent for all reasonable out-of-pocket costs and
expenses of the Agent (including, without limitation, the
reasonable fees and expenses of Winstead, Sechrest & Minick P.C.,
special counsel to the Agent) in connection with (i) the
negotiation, preparation, execution and delivery of this
Agreement and the Notes and the making of the Loans hereunder and
(ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any
of the Notes (whether or not consummated) and (b) to pay or
reimburse each of the Banks and the Agent for all reasonable
out-of-pocket costs and expenses of the Banks and the Agent
(including, without limitation, the reasonable fees and expenses
of legal counsel) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom,
including, without limitation, all manner of participation in or
other involvement with (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated)
and (ii) the enforcement of this Section 12.03.
12.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may
be modified or supplemented only by an instrument in writing
signed by the Company, the Agent and the Majority Banks, or by
the Company and the Agent acting with the consent of the Majority
Banks, and any provision of this Agreement may be waived by the
Majority Banks or by the Agent acting with the consent of the
<PAGE> 46
Majority Banks; provided that: (a) no modification, supplement
or waiver shall, unless by an instrument signed by all of the
Banks or by the Agent acting with the consent of all of the
Banks: (i) increase, or extend the term of the Commitments, or
extend the time or waive any requirement for the reduction or
termination of the Commitments, (ii) extend the date fixed for
the payment of principal of or interest on any Loan or any fee
(other than the agency fee or syndication fee) hereunder,
(iii) reduce the amount of any such payment of principal,
(iv) reduce the rate at which interest is payable thereon or any
fee (other than the agency fee or syndication fee) is payable
hereunder, (v) alter the rights or obligations of the Company to
prepay Loans, (vi) alter the terms of this Section 12.04,
(vii) modify the definition of the term "Majority Banks" or
modify in any other manner the number or percentage of the Banks
required to make any determinations or waive any rights hereunder
or to modify any provision hereof, or (viii) waive any of the
conditions precedent set forth in Section 7 hereof; (b) any
modification or supplement of Section 11 hereof shall require the
consent of the Agent; and (c) any modification or supplement of
Section 6 hereof shall require the consent of the Guarantor and
each of the Banks.
12.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
12.06 Assignments and Participations.
(a) Neither Obligor may assign any of its rights or
obligations hereunder or under the Notes without the prior
consent of all of the Banks and the Agent, except as permitted by
Section 9.05 hereof.
(b) Each Bank may assign any of its Loans, its Note,
and its Commitment with the consent of the Company and the Agent
(which consents shall not be unreasonably withheld or delayed);
provided that
(i) no such consent by the Company or the Agent shall
be required in the case of any assignment to another Bank or
an affiliate of a Bank and no such consent by the Company
shall be required in the case of any assignment by FITX in
connection with its primary syndication of the Loans;
(ii) except to the extent the Company and the Agent
shall otherwise consent, any such partial assignment (other
than to another Bank) shall be in an amount at least equal
to $10,000,000; and
<PAGE> 47
(iii) each such assignment by a Bank of its Loans,
Note or Commitment shall be made in such manner so that the
same portion of its Loans, Note and Commitment is assigned
to the respective assignee.
Upon execution and delivery by the assignee to the Company and
the Agent of an instrument in writing in substantially the form
of Exhibit E hereto, pursuant to which such assignee agrees to
become a "Bank" hereunder (if not already a Bank) having the
Commitment and Loans specified in such instrument, upon payment
by the assignee to the Agent of a processing fee in the amount of
$2,000 (except in the case of assignments to an affiliate in
which case no processing fee shall be payable), and upon consent
thereto by the Company and the Agent to the extent required
above, the assignee shall have, to the extent of such assignment
(unless provided in such assignment with the consent of the
Company and the Agent), the obligations, rights and benefits of a
Bank hereunder holding the Commitment and Loans (or portions
thereof) assigned to it (in addition to the Commitment and Loans,
if any, theretofore held by such assignee) and the assigning Bank
shall, to the extent of such assignment, be released from the
Commitment (or portion thereof) so assigned.
(c) A Bank may, but only with the consent of the Company
(which shall not be unreasonably withheld or delayed), sell or
agree to sell to one or more other Persons a participation in all
or any part of any Loans held by it, or in its Commitment, in
which event each purchaser of a participation (a "Participant")
shall be entitled to the rights and benefits of the provisions of
Section 9.01(g) hereof with respect to its participation in such
Loans and Commitment as if (and the Company shall be directly
obligated to such Participant under such provisions as if) such
Participant were a "Bank" for purposes of said Section, but,
except as otherwise provided in Section 4.07(b) hereof, shall not
have any other rights or benefits under this Agreement or any
Note (the Participant's rights against such Bank in respect of
such participation to be those set forth in the agreements
executed by such Bank in favor of the Participant). All amounts
payable by the Company to any Bank under Section 5 hereof in
respect of Loans held by it, and its Commitment, shall be
determined as if such Bank had not sold or agreed to sell any
participations in such Loans and Commitment, and as if such Bank
were funding each of such Loan and Commitment in the same way
that it is funding the portion of such Loan and Commitment in
which no participations have been sold. In no event shall a Bank
that sells a participation agree with the Participant to take or
refrain from taking any action hereunder except that such Bank
may agree with the Participant that it will not, without the
consent of the Participant, agree to (i) increase or extend the
term, or extend the time or waive any requirement for the
reduction or termination, of such Bank's Commitment, (ii) extend
<PAGE> 48
the date fixed for the payment of principal of or interest on the
related Loan or Loans or any portion of any fee hereunder payable
to the Participant, (iii) reduce the amount of any such payment
of principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to
receive such interest or fee, (v) alter the rights or obligations
of the Company to prepay the related Loans or (vi) consent to any
modification, supplement or waiver hereof to the extent that the
same, under Section 12.04 hereof, requires the consent of each
Bank.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.06,
any Bank may (without notice to the Company, the Agent or any
other Bank and without payment of any fee) assign and pledge all
or any portion of its Loan and its Note to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank, and such
Loan and Note shall be fully transferrable as provided therein.
No such assignment shall release the assigning Bank from its
obligations hereunder.
(e) A Bank may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the
provisions of Section 12.12 hereof.
12.07 Survival. The obligations of the Company under
Sections 5.01, 5.05, 5.06 and 12.03 hereof, the obligations of
the Guarantor under Section 6.03 hereof, and the obligations of
the Banks under Section 11.05 hereof, shall survive the repayment
of the Loans and the termination of the Commitments and, in the
case of any Bank that may assign any interest in its Commitment
or Loans hereunder, shall survive the making of such assignment,
notwithstanding that such assigning Bank may cease to be a "Bank"
hereunder. In addition, each representation and warranty made,
or deemed to be made by a notice of any Loan, herein or pursuant
hereto shall survive the making of such representation and
warranty, and no Bank shall be deemed to have waived, by reason
of making any Loan, any Default that may arise by reason of such
representation or warranty proving to have been false or
misleading, notwithstanding that such Bank or the Agent may have
had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time
such Loan was made.
12.08 Captions. The table of contents and captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
<PAGE> 49
12.09 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
12.10 Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the law
of the State of Texas and the applicable laws of the United
States of America.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 Treatment of Certain Information;
Confidentiality. Each Bank and the Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees
and representatives) to keep confidential any non-public
information supplied to it by either Obligor pursuant to this
Agreement that either Obligor identifies to such Bank or the
Agent (as the case may be) as confidential at the time either
Obligor so supplies such information, provided that nothing
herein shall limit the disclosure of any such information (i) to
the extent required by statute, rule, regulation or judicial
process, (ii) to counsel for any of the Banks or the Agent,
(iii) to bank examiners, auditors or accountants, (iv) to the
Agent or any other Bank, (v) in connection with any litigation to
which any one or more of the Banks or the Agent is a party,
(vi) to a subsidiary or affiliate of such Bank or (vii) to any
assignee or participant (or prospective assignee or participant)
so long as such assignee or participant (or prospective assignee
or participant) first executes and delivers to the respective
Bank a Confidentiality Agreement substantially in the form of
Exhibit D hereto (or executes and delivers to such Bank an
acknowledgement to the effect that it is bound by the provisions
of this Section 12.12, which acknowledgement may be included as
part of the respective assignment or participation agreement
pursuant to which such assignee or participant acquires an
interest in the Loans hereunder); provided, further, that
(x) unless specifically prohibited by applicable law or court
order, each Bank and the Agent shall, prior to disclosure
thereof, use its best efforts to notify the Company of any
request for disclosure of any such non-public information (A) by
any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or
(B) pursuant to legal process, provided, however, the failure of
<PAGE> 50
the Agent or any Bank to notify the Company prior to disclosure
after using its best efforts as aforesaid shall not result in any
liability or obligation to the Agent or such Bank, and (y) in no
event shall any Bank or the Agent be obligated or required to
return any materials furnished by the Guarantor or the Company.
12.13 Interest. It is the intention of the parties
hereto to conform strictly to applicable usury laws.
Accordingly, notwithstanding any provision to the contrary in
this Agreement, the Notes, the other Loan Documents or in any of
the documents securing or guarantying payment hereof or otherwise
relating hereto, or in any communication or writing by the Agent,
the Banks, or any of them, or any other Person, relating to this
loan, whether now or hereafter arising, in no event or
contingency shall this Agreement or such instruments or
documents, communications or writings permit or require the
payment of any sums which constitute interest under applicable
law, or permit or require the charging, taking, reserving, or
receiving by the Agent, the Banks, or any of them, or any other
Person, of any sums which constitute interest under applicable
law, in excess of the maximum amount permitted by such law. If
any excess interest otherwise would be deemed to be contracted
for, charged, taken, reserved or received under this Agreement,
the Notes, the other Loan Documents or under the terms of any of
the documents, communications or writings by the Agent, the
Banks, or any of them, or any other Person, securing payment
thereof or otherwise relating thereto, or in the event the
maturity of the indebtedness evidenced by the Notes is
accelerated in whole or in part, or in the event all or part of
the principal or interest on the Notes shall be prepaid, then it
is agreed as follows: (i) any excess or unearned interest
contracted for, charged, taken, reserved, or received, shall be
deemed a mistake and canceled automatically, without the
necessity of any other communication or writing by the Agent, the
Banks, or any of them, or any other Person, (ii) any excess or
unearned interest which is paid shall be credited to the unpaid
principal amount hereof or, to the extent the unpaid principal
amount hereof shall have been or would be paid in full, refunded
to the Company or other obligor as the case may be, at the
holder's option and (iii) the Agreement, the Notes, the other
Loan Documents or documents securing payment thereof or otherwise
relating thereto, communication or writing, as the case may be,
shall be reformed automatically to permit only the payment,
charging, taking, reserving, or receiving of accrued unpaid
interest at the maximum lawful rate. Without limiting the
foregoing, in determining the maximum amount of lawful interest
under this Agreement, the Notes, the other Loan Documents or
under such other documents or instruments which are made for the
purpose of determining such rate, all interest at any time
contracted for, charged, taken, reserved or received from the
Company or otherwise by the holder or holders thereof in
<PAGE> 51
connection with the Notes, the other Loan Documents or this
Agreement, shall be amortized, prorated, allocated, and spread,
to the full extent permitted by applicable law, during the period
of the full term of the loan evidenced hereby, taking into
account all renewal and extension periods.
The provisions set forth in this Section shall be
deemed to be incorporated into each of the documents executed in
connection with this Agreement, the Notes, the other Loan
Documents or under the terms of any of the documents securing
payment thereof or otherwise relating thereto, and in every
communication and writing relating to this Agreement, the Notes,
the other Loan Documents or under the terms of any of the
documents securing payment thereof or otherwise relating thereto,
now or hereafter arising, whether or not the same expressly
references the preceding paragraph, and any and all figures set
forth therein shall, for the purpose of determining the extent of
the indebtedness set forth or asserted therein, or otherwise
contracted for, charged, taken, reserved, or received, as
applicable, be recomputed automatically by the Company or other
obligor, or by any court with proper jurisdiction considering the
same, or both, as necessary to give effect to the adjustments and
credits required and agreed upon therein and the other agreements
set forth therein, without the necessity of any other
communication or writing.
If the applicable state or federal usury law is amended
after the date hereof to permit a greater rate of interest to be
contracted for, charged, taken, reserved, or received under this
Agreement, the Notes, the other Loan Documents or under the terms
of any of the documents securing payment thereof or otherwise
relating thereto, than is permitted under applicable state or
federal law as of the date hereof, then the maximum lawful rate
of interest applicable to this Agreement, the Notes, the other
Loan Documents or under the terms of any of the documents
securing payment thereof or otherwise relating thereto, shall be
increased to the maximum rate of interest allowed by such
subsequent law or amendment, to be effective as of the effective
date of such law or amendment, and such additional charges that
may become owing by reason of such increase shall be payable on
demand.
12.14 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT, THE
NOTES, THE OTHER LOAN DOCUMENTS, AND THE INSTRUMENTS AND
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
<PAGE> 52
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
CENTRAL AND SOUTH WEST SERVICES, INC.
By_________________________
Shirley S. Briones
Title: Treasurer
Address for Notices:
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Attention: Stephen D. Wise
Telecopier No.: (214) 777-1223
Telephone No.: (214) 777-1205
<PAGE> 53
CENTRAL AND SOUTH WEST CORPORATION
By_________________________
Stephen J. McDonnell
Title: Treasurer
Address for Notices:
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Attention: Stephen D. Wise
Telecopier No.: (214) 777-1223
Telephone No.: (214) 777-1205
<PAGE> 54
BANKS
Commitment
$60,000,000 FIRST INTERSTATE BANK
OF TEXAS, N.A.
By_________________________
Title:
Lending Office for Base Rate Loans:
First Interstate Bank of Texas,
N.A.
1000 Louisiana
Houston, TX 77002
Lending Office for Loans
other than Base Rate Loans:
First Interstate Bank of Texas,
N.A.
1000 Louisiana
Houston, TX 77002
Address for Notices:
First Interstate Bank of Texas,
N.A.
1445 Ross Ave. 3rd Fl.
Dallas, TX 75201
Attention: Ken Taylor/
Connor Duffey
Telecopier No.: (214) 740-1543
Telephone No.: (214) 740-1549
<PAGE> 55
FIRST INTERSTATE BANK
OF TEXAS, N.A.,
as Agent
By_________________________
Title:
Address for Notices to
First Interstate Bank of
Texas, N.A., as Agent:
First Interstate Bank of Texas,
N.A.
1445 Ross Ave. 3rd Fl.
Dallas, TX 75201
Attention: Ken Taylor/
Connor Duffey
Telecopier No.: (214) 740-1543
Telephone No.: (214) 740-1549
<PAGE> 56
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
$_______________ December __, 1994
Dallas, Texas
FOR VALUE RECEIVED, CENTRAL AND SOUTH WEST SERVICES,
INC., a Texas corporation (the "Company"), hereby promises to pay
to __________________ (the "Bank"), for account of its respective
Applicable Lending Offices provided for by the Credit Agreement
referred to below, at the principal office of First Interstate
Bank of Texas, N.A., at ______________________________, the
principal sum of _______________ Dollars (or such lesser amount
as shall equal the aggregate unpaid principal amount of the Loans
made by the Bank to the Company under the Credit Agreement), in
lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of
such Loan until such Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan made by the Bank to
the Company, and each payment made on account of the principal
thereof, shall be recorded by the Bank on its books and, prior to
any transfer of this Note, endorsed by the Bank on the schedule
attached hereto or any continuation thereof, provided that the
failure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Company to make a payment
when due of any amount owing under the Credit Agreement or
hereunder in respect of the Loans made by the Bank.
This Note is one of the Notes referred to in the Credit
Agreement dated as of December 22, 1994 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement") between the Company, Central and South West
Corporation, as guarantor, the lenders named therein and First
Interstate Bank of Texas, Inc., as Agent, and evidences Loans
made by the Bank thereunder. Terms used but not defined in this
Note have the respective meanings assigned to them in the Credit
Agreement.
The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of Loans upon the terms and conditions
specified therein.
<PAGE> 57
Except as permitted by Section 12.06 of the Credit
Agreement, this Note may not be assigned by the Bank to any other
Person.
This Note shall be governed by, and construed in
accordance with, the law of the State of Texas.
CENTRAL AND SOUTH WEST SERVICES, INC.
By_________________________
Title:
<PAGE> 58
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted under the
within-described Credit Agreement to the Company, on the dates,
in the principal amounts, of the Types, bearing interest at the
rates and having Interest Periods (if applicable) of the
durations set forth below, subject to the payments,
Continuations, Conversions and prepayments of principal set forth
below:
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ------ ---- -------- --------- --------- ------ --------
<PAGE> 59
EXHIBIT B
[Form of Opinion of Special Counsel to the Obligors]
__________, 199_
To the Banks party to the
Credit Agreement referred to
below and First Interstate
Bank of Texas, N.A., as Agent
Ladies and Gentlemen:
We have acted as special counsel to Central and South
West Services, Inc. (the "Company"), and Central and South West
Corporation (the "Guarantor"), in connection with (i) the Credit
Agreement (the "Credit Agreement") dated as of December 22, 1994,
between the Company, the Guarantor, the lenders named therein,
and First Interstate Bank of Texas, N.A., as Agent, providing for
loans to be made by said lenders to the Company in an aggregate
principal amount not exceeding $60,000,000 and (ii) the various
other agreements, instruments and other documents referred to in
the next following paragraph. Except as otherwise provided
herein, terms defined in the Credit Agreement are used herein as
defined therein. This opinion letter is being delivered pursuant
to Section 7.01(c) of the Credit Agreement.
In rendering the opinions expressed below, we have
examined the following agreements, instruments and other
documents:
(a) the Credit Agreement;
(b) the Notes; and
(c) such records of the Obligors and such other
documents as we have deemed necessary as a basis
for the opinions expressed below.
The agreements, instruments and other documents referred to in
the foregoing lettered clauses (other than clause (c) above) are
collectively referred to as the "Credit Documents"; and the
Company and the Guarantor are herein collectively referred to as
the "Obligors".
In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us
as originals and the conformity with authentic original documents
of all documents submitted to us as copies. When relevant facts
were not independently established, we have relied upon
statements of governmental officials and upon representations
made in or pursuant to the Credit Documents and certificates of
appropriate representatives of the Obligors.
<PAGE> 60
In rendering the opinions expressed below, we have
assumed, with respect to all of the documents referred to in this
opinion letter, that (except, to the extent set forth in the
opinions expressed below, as to the Obligors):
(i) such documents have been duly authorized by,
have been duly executed and delivered by, and
constitute legal, valid, binding and enforceable
obligations of, all of the parties to such
documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the
power and authority (corporate or other) to
execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject
also to the comments and qualifications set forth below, and
having considered such questions of law as we have deemed
necessary as a basis for the opinions expressed below, we are of
the opinion that:
1. The Guarantor is a corporation validly
existing and in good standing under the laws of the
State of Delaware.
2. The Guarantor has all requisite corporate power
to execute and deliver, and to perform its obligations
under, the Credit Agreement.
3. The execution, delivery and performance by the
Guarantor of the Credit Agreement have been duly
authorized by all necessary corporate action on the
part of the Guarantor.
4. No authorization, approval or consent of, and
no filing or registration with, any governmental or
regulatory authority or agency of the United States of
America is required on the part of either Obligor for
the execution, delivery or performance by either
Obligor of any of the Credit Documents to which it is a
party or for the borrowings by the Company under the
Credit Agreement, other than those already made or
obtained.
<PAGE> 61
5. The execution, delivery and performance by
each Obligor of, and the consummation by each Obligor
of the transactions contemplated by, the Credit
Documents to which such Obligor is a party do not and
will not (a) violate any provision of the charter or
by-laws of the Guarantor, (b) violate any applicable
Federal law, rule or regulation, (c) violate any order,
writ, injunction or decree of any court or governmental
authority or agency or any arbitral award applicable to
either of the Obligors of which we have knowledge or
(d) result in a breach of, constitute a default under,
require any consent under, or result in the
acceleration or required prepayment of any indebtedness
pursuant to the terms of, any agreement or instrument
governing or evidencing indebtedness in an amount in
excess of $10,000,000 of which we have knowledge to
which either Obligor is a party or by which either of
them is bound or to which either of them is subject, or
result in the creation or imposition of any lien upon
any property of either Obligor pursuant to, the terms
of any such agreement or instrument.
6. Except as set forth in the quarterly and
annual reports referred to in Section 8.02 of the
Credit Agreement, we have no knowledge of any legal or
arbitral proceedings, or any proceedings by or before
any governmental or regulatory authority or agency,
pending or threatened against or affecting either of
the Obligors that, if adversely determined, could be
reasonably expected to have a Material Adverse Effect.
The foregoing opinions are limited to matters involving
the Federal laws of the United States and the Delaware General
Corporation Law, and we do not express any opinion as to the laws
of any other jurisdiction.
At the request of our clients, this opinion letter is,
pursuant to Section 7.01(c) of the Credit Agreement, provided to
you by us in our capacity as counsel to the Obligors and may not
be relied upon by any Person for any purpose other than in
connection with the transactions contemplated by the Credit
Agreement without, in each instance, our prior written consent.
Very truly yours,
RMG/RBW/JMH
<PAGE> 62
EXHIBIT C
[Form of Opinion of Special Texas Counsel to the Obligors]
December __, 1994
The Banks party to, and
First Interstate Bank of Texas, N.A., as Agent under,
the Credit Agreement dated as of December 22, 1994,
by and among Central and South West Services, Inc.,
Central and South West Corporation,
the Banks and the Agent
c/o First Interstate Bank of Texas, N.A.
[Address]
Ladies and Gentlemen:
We have acted as special Texas counsel to Central and
South West Services, Inc., a Texas corporation (the "Company"),
and Central and South West Corporation, a Delaware corporation
(the "Guarantor" and, together with the Company, the "Obligors"),
in connection with the execution and delivery by the Company and
the Guarantor of the Credit Agreement dated as of December 22,
1994 (the "Credit Agreement") by and among the Obligors, the
banks party thereto and First Interstate Bank of Texas, N.A., as
Agent for said banks. This opinion is being delivered pursuant
to Section 7.01(d) of the Credit Agreement. Unless otherwise
provided herein, capitalized terms used herein have the
respective meanings assigned to them in the Credit Agreement.
In connection with the opinions hereinafter expressed,
we have (i) investigated such questions of law, (ii) examined
execution copies of the Credit Agreement and the notes to be
issued as of the date hereof (the "Notes"), and originals or
copies of such other documents and certificates, and (iii)
received such information from officers and representatives of
the Obligors, in each case as we have deemed necessary or
appropriate for the purposes of the opinions hereinafter
expressed. In rendering such opinions, we have assumed (i) the
due authorization, execution and delivery of the Credit Agreement
by all parties to such document other than the Company, and that
the Credit Agreement is valid, binding and enforceable against
the parties thereto other than the Obligors, (ii) the legal
capacity of natural persons, (iii) the genuineness of all
signatures, (iv) the authenticity of all documents submitted to
us as originals, and (v) the conformity with the originals of all
documents submitted to us as certified or photostatic copies and
the authenticity of the originals of such copies. As to
questions of fact material to our opinions, we have, when
relevant facts were not independently established, relied upon
certificates of officers of the Obligors and upon the
representations made by the Obligors in the Credit Agreement.
<PAGE> 63
Based upon the foregoing, and subject to the
assumptions, qualifications and exceptions set forth herein, we
are of the opinion that:
1. The Company is validly existing and in good
standing as a corporation under the laws of the State of Texas.
2. The Company has the corporate power and authority
to execute, deliver and perform its obligations under the Credit
Agreement and to issue Notes and to perform its obligations
thereunder.
3. The execution, delivery and performance of the
Credit Agreement by the Company, including the issuance and
delivery by the Company of the Notes, have been duly authorized
by all corporate action necessary on the part of the Company and
do not violate any provision of the articles of incorporation or
bylaws of the Company.
4. The Credit Agreement constitutes the legal, valid
and binding obligation of the Obligors, enforceable against the
Obligors in accordance with its terms and the Notes constitute
the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with their terms,
in each case under Texas law to such an extent that any law,
statute, ordinance, rule, regulation or principle that may
modify, limit, render unenforceable or delay certain of your
rights or remedies under the Credit Agreement would not
substantially diminish the practical realization of the benefits
intended to be conferred thereby, except for the economic
consequences of any judicial, administrative or procedural delay
which may result from the application of any such law, statute,
ordinance, rule, regulation or principle. The enforceability of
the Obligors' obligations under the Credit Agreement, and of the
Company's obligations under the Notes, is further subject to the
effect of (i) any applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, preference or
similar law affecting creditors' rights generally and (ii)
general principles of equity, reasonableness, good faith and fair
dealing (regardless of whether considered in a proceeding in
equity or at law).
The opinions herein expressed are as of the date hereof
only, and we assume no obligation to update or supplement such
opinions to reflect any facts or circumstances that may hereafter
come to our attention or any changes in law that may hereafter
occur or become effective.
<PAGE> 64
We are members of the Bar of the State of Texas and we
do not herein intend to express any opinion as to matters
governed by any laws other than the law of the State of Texas.
We express no opinion with regard to the federal laws of the
United States of America.
This opinion is furnished to you pursuant to Section
7.01(d) of the Credit Agreement and may not be relied upon by any
other person or by you in any other context without our prior
written consent.
Very truly yours,
<PAGE> 65
EXHIBIT D
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of December __, 1994
(the "Credit Agreement"), between Central and
South West Services, Inc. (the "Company"),
Central and South West Corporation, as
guarantor, the lenders named therein and First
Interstate Bank of Texas, N.A., as Agent.
Dear Ladies and Gentlemen:
As a Bank party to the Credit Agreement, we have agreed
with the Company pursuant to Section 12.12 of the Credit
Agreement to use reasonable precautions to keep confidential,
except as otherwise provided therein, all non-public information.
As provided in said Section 12.12, we are permitted to
provide you, as a prospective [holder of a participation in the
Loans (as defined in the Credit Agreement)] [assignee Bank], with
certain of such non-public information subject to the execution
and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such
information will not be made available to you until your
execution and return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you
agree (on behalf of yourself and each of your affiliates,
directors, officers, employees and representatives and for the
benefit of us and each Obligor) that (A) such information will
not be used by you except in connection with the proposed
[participation][assignment] mentioned above and (B) you shall
keep such information confidential, provided that nothing herein
shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process,
(ii) to your counsel or to counsel for any of the Banks or the
Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Agent or any other Bank, (v) in connection with any
litigation to which you or any one or more of the Banks or the
<PAGE> 66
Agent are a party, or (vi) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first
executes and delivers to you a Confidentiality Agreement
substantially in the form hereof; provided further, that
(x) unless specifically prohibited by applicable law or court
order, you agree, prior to disclosure thereof, to use your best
efforts to notify the Company of any request for disclosure of
any such non-public information (A) by any governmental agency or
representative thereof (other than any such request in connection
with an examination of your financial condition by such
governmental agency) or (B) pursuant to legal process, provided
however, that failure by you to notify the Company prior to
disclosure after using your best efforts as aforesaid shall not
result in any liability or obligation to you, and (y) that in no
event shall you be obligated to return any materials furnished to
you pursuant to this Confidentiality Agreement.
If you are a prospective assignee, your obligations
under this Confidentiality Agreement shall be superseded by
Section 12.12 of the Credit Agreement on the date upon which you
become a Bank under the Credit Agreement pursuant to
Section 12.06(b) thereof.
Please indicate your agreement to the foregoing by
signing as provided below the enclosed copy of this
Confidentiality Agreement and returning the same to us.
Very truly yours,
[INSERT NAME OF BANK]
By_________________________
The foregoing is agreed to
as of the date of this letter.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By_________________________
<PAGE> 67
EXHIBIT E
[Form of Assignment]
ASSIGNMENT AND ACCEPTANCE
Dated ______________, 19__
Reference is made to the Credit Agreement dated as of December
__, 1994 (as the same may be amended and in effect from time to
time, the "Credit Agreement"), among CENTRAL AND SOUTH WEST
SERVICES, INC., a Texas corporation (the "Company"), CENTRAL AND
SOUTH WEST CORPORATION, a Delaware corporation (the "Guarantor"),
the Banks from time to time party thereto (the "Banks"), and
FIRST INTERSTATE BANK OF TEXAS, N.A., as agent for itself and the
other Banks (in such capacity, the "Agent"). Capitalized terms
used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement.
________________ (the "Assignor") and
__________________________________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and
assumes from the Assignor, a ____________%
interest in and to all the Assignor's rights and
obligations under the Credit Agreement and the
other Loan Documents as of the Effective Date (as
defined below) (including, without limitation,
such percentage interest in Assignor's pro rata
interest in the Loans outstanding on the Effective
Date together with such percentage interest in all
unpaid interest and fees accrued from the
Effective Date). This Assignment and Acceptance
is made by Assignor without recourse.
2. The Assignor (i) represents that as of the date
hereof, the outstanding principal balance of the
Loans made by Assignor to the Company is
$__________, (as unreduced by any assignments
which have not yet become effective); (ii) makes
no representation or warranty and assumes no
responsibility with respect to any statements,
warranties or representations made in or in
connection with the Credit Agreement or any other
Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other Loan
Document, other than that Assignor is the legal
<PAGE> 68
and beneficial owner of the interest being
assigned by it hereunder and that such interest is
free and clear of any adverse claim; (iii) makes
no representation or warranty and assumes no
responsibility with respect to the financial
condition of the Company or the Guarantor or the
performance or observance by the Company or the
Guarantor of any of their obligations under the
Agreement or any other Loan Document; and (iv)
attaches the Note held by Assignor and requests
that the Agent exchange such Note for new Notes
payable to the order of (a) the Assignee in an
amount equal to the aggregate outstanding
principal amount of the Loans assumed, and (b) the
Assignor in an amount equal to the aggregate
outstanding principal amount of the Loans being
retained by the Assignor as specified above.
3. The Assignee (a) represents and warrants that it
is legally authorized to enter in this Assignment
and Acceptance; (b) confirms that it has received
a copy of the Credit Agreement, together with
copies of the most recent financial statements
delivered pursuant to Section 9.01 thereof and
such other documents and information as it has
deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently
and without reliance upon the Agent, the Assignor,
or any other Bank and based on such documents and
information as it shall deem appropriate at the
time, continue to make its own credit decisions in
taking or not taking action under the Credit
Agreement and the other Loan Documents; (d)
confirms that it is eligible to be an Assignee;
(e) appoints and authorizes First Interstate Bank
of Texas, N.A. to take such action as agent on its
behalf and to exercise such powers under the Loan
Documents as are delegated to the agent by the
terms thereof, together with such powers as are
reasonably incidental thereto; (f) agrees that it
will perform in accordance with their terms all
the obligations which by the terms of the Credit
Agreement and the other Loan Documents are
required to be performed by it as a Bank or
lender; and (g) agrees that it will keep
confidential in accordance with the terms of the
Confidentiality Agreement executed by it in
connection with its Assignment and Acceptance, all
information with respect to the Company or the
Guarantor furnished to it by the Company or the
<PAGE> 69
Guarantor or the Assignor (other than information
generally available to the public or otherwise
available to the Assignor on a nonconfidential
basis)[; and (h) attaches the forms prescribed by
the Internal Revenue Service of the United States
certifying as to the Assignee's exemption from
United States withholding taxes with respect to
all payments to be made to the Assignee under the
Loan Documents or such other documents as are
necessary to indicate that all such payments are
subject to such tax at a rate reduced by an
applicable tax treaty].[1]
4. The effective date for this Assignment and
Acceptance shall be __________, 19__ (the
"Effective Date").[2] Following the execution of
this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and
recording by the Agent.
5. Upon such acceptance and recording, from and after
the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, shall
have the rights and obligations of a Bank
thereunder and under the other Loan Documents and
(ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its
rights and be released from its obligations under
the Credit Agreement and the other Loan Documents.
6. Upon such acceptance and recording, from and after
the Effective Date, the Agent shall make all
payments in respect of the interest assigned
hereby (including payments of principal, interest,
fees, and other amounts) to the Assignee. The
Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to the
Effective Date by the Agent or with respect to the
making of this assignment directly between
themselves.
________________________
[1] If the Assignee is organized under the laws of a jurisdiction
outside the United States.
[2] Such date shall be at least five (5) Business Days after the
execution of this Assignment and Acceptance and delivery
thereof to the Agent.
<PAGE> 70
7. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State
of Texas and applicable laws of the United States of
America.
[NAME OF ASSIGNOR],
By:___________________________
Name:______________________
Title:_____________________
Amount of Note as of
Effective Date:
$____________________
[NAME OF ASSIGNEE],
By:___________________________
Name:______________________
Title:_____________________
Amount of Note as of
Effective Date:
$____________________
Accepted on the ___ day
of ____________, 19__.
FIRST INTERSTATE BANK OF TEXAS, N.A.
as agent for itself and the other Banks
By:___________________________
Name:______________________
Title:_____________________
CENTRAL AND SOUTH WEST SERVICES, INC.
By:___________________________
Name:______________________
Title:_____________________
<PAGE> 1
EXHIBIT 5
---------
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
January 9, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Central and South West Services, Inc.
& Central and South West Corporation
Form U-1 Declaration (70-8459)
Dear Sirs:
We refer to the Form U-1 Application-Declaration (File
No. 70-8459) (the "Application-Declaration") under the Public
Utility Holding Company Act of 1935, as amended (the "1935 Act"),
and the Certificate of Notification relating thereto, filed by
Central and South West Services, Inc. (the "Company"), a Texas
corporation and a wholly-owned subsidiary of Central and South
West Corporation ("CSW"), a Delaware corporation and a registered
holding company, and CSW. The Certificate of Notification
relates to a Credit Agreement dated as of December 22, 1994 among
the Company, CSW and First Interstate Bank of Texas, N.A., as
agent (the "Credit Agreement"), pursuant to which the Company
will borrow $60 million to refinance certain of the Company's
long-term assets, including the CSW headquarters building located
in Dallas, Texas. We have acted as special counsel for the
Company and CSW in connection with the Application-Declaration
and the Credit Agreement, and, as such counsel, we are familiar
with the corporate proceedings taken by the Company and CSW as
described in the Application-Declaration and Certificate of
Notification.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Company and CSW,
certificates of public officials, certificates of officers and
representatives of the Company and CSW and other documents as we
have deemed it necessary to require as a basis for the opinions
hereinafter expressed. In such examination we have assumed the
genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with
the originals of all documents submitted to us as copies. As to
various questions of fact material to such opinions we have, when
relevant facts were not independently established, relied upon
certificates by officers of the Company, CSW and other
appropriate persons and statements contained in the Application-
Declaration.
<PAGE> 2
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion
that:
1. The Company is validly organized and duly existing
under the laws of the State of Texas.
2. CSW is validly organized and duly existing under
the laws of the State of Delaware.
3. All state laws applicable to the Credit Agreement
as described in the Application-Declaration have been
complied with.
4. The Promissory Notes (the "Notes") issued under the
Credit Agreement are valid and binding obligations of
the Company in accordance with their terms, subject as
to the enforceability to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws of
general applicability affecting the enforcement of
creditors' rights, and (b) the application of general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity
or at law), including without limitation (i) the
possible unavailability of specific performance,
injunctive relief or any other equitable remedies and
(ii) concepts of materiality, reasonableness, good
faith and fair dealing.
5. The guarantee (the "Guarantee") of the Notes by CSW
is a valid and binding obligation of CSW in accordance
with its terms, subject as to the enforceability to (a)
bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general applicability affecting
the enforcement of creditors' rights, and (b) the
application of general principles of equity (regardless
of whether such enforceability is considered in a
proceeding in equity or at law), including without
limitation (i) the possible unavailability of specific
performance, injunctive relief or any other equitable
remedies and (ii) concepts of materiality,
reasonableness, good faith and fair dealing.
6. The issuance and sale of the Notes as described in
the Application-Declaration did not violate the legal
rights of the holders of any securities issued by the
Company or any associate company of the Company.
In rendering the opinions hereinabove expressed, we
have relied upon opinions of other counsel to the Company and CSW
who are qualified to practice in jurisdictions pertaining to the
transactions described above in which we are not admitted to
<PAGE> 3
practice. We do not express any opinion as to matters governed
by any laws other than the Federal laws of the United States of
America, the laws of the State of New York and, to the extent
hereinabove stated, the laws of other jurisdictions pertaining to
the transactions described above in reliance upon said opinions
of counsel to the Company and CSW.
We hereby consent to the use of this opinion as an
exhibit to the Certificate of Notification.
Very truly yours,
/s/ MILBANK, TWEED, HADLEY & MCCLOY
Milbank, Tweed, Hadley & McCloy
RBW/RMG
