<PAGE>
As filed with the Securities and Exchange Commission on August 8, 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
Registration Statement Under the Securities Act of 1933
ENSERCH CORPORATION
(Exact name of registrant as specified in its charter)
Texas ENSERCH Center 75-0399066
(State or other 300 South St. Paul St. (I.R.S. Employer
jurisdiction of Dallas, Texas 75201 Identification
incorporation or 214-651-8700 Number)
organization) (Address, including zip code,
and telephone number, including
area code, of Registrant's
principal executive offices)
W. T. Satterwhite, Esq.
Senior Vice President
and General Counsel
ENSERCH Center
300 South St. Paul St.
Dallas, Texas 75201
214-670-2175
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
Title of Each
Class of Amount Proposed Maximum Proposed Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Share(1) Offering Price(1) Fee
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value
$4.45 1,204,098 $17.75 $21,372,740 $7,370
-------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c), the offering price and registration fee are
computed on the basis of the average of the high and low prices of the
Common Stock as reported by the New York Stock Exchange on August 3, 1995.
</FN>
</TABLE>
The Corporation hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Corporation shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
<PAGE>
PROSPECTUS
1,204,098 Shares
ENSERCH CORPORATION
Common Stock
This Prospectus relates to the offer and sale of an aggregate of up to
1,204,098 shares (the "Shares") of common stock, par value $4.45 per share (the
"Common Stock"), of ENSERCH Corporation (the "Corporation"), by certain
stockholders of the Corporation (the "Selling Stockholders"). The Selling
Stockholders are former capital stockholders of DGS Holdings Corp., a Delaware
corporation ("DGS"). The Shares offered hereby were acquired by former capital
stockholders of DGS under the terms of the Agreement for Exchange of Stock (as
defined herein).
The Selling Stockholders directly, through agents designated from time to
time, or through dealers or underwriters also to be designated, may sell the
Shares from time to time on terms to be determined at the time of sale. The
Common Stock is listed on the New York Stock Exchange ("NYSE"), and the Shares
may be sold from time to time by the Selling Stockholders either directly in
private transactions, or through one or more brokers or dealers through one or
more exchanges at prices related to the current market price or at negotiated
terms.
Upon any sale of the Shares offered hereby, the Selling Stockholders and
participating agents, brokers or dealers may be deemed to be underwriters as
that term is defined in the Securities Act of 1933, as amended (the "Securities
Act"), and commissions or discounts or any profit realized on the resale of such
Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The Corporation, however, understands that
the Selling Stockholders do not admit that they are underwriters within the
meaning of the Securities Act. The Corporation will not receive any of the
proceeds from the sales of the Shares offered hereby.
No underwriter is being utilized in connection with this offering, except
as may be used from time to time by one or more of the Selling Stockholders as
described herein. See "Plan of Distribution." The Corporation will pay all
expenses incurred in connection with this offering, which are estimated to be
approximately $12,000.
On August 3, 1995, the closing price of the Common Stock on the New York
Stock Exchange (trading symbols "ENS") was $17.875.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August _____, 1995.
<PAGE>
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
in Chicago, Illinois (Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60611) and New York, New York (75 Park Place, Room 1228,
New York, New York 10048). Copies of such material can also be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at prescribed rates. The Common Stock is
listed on, and reports, proxy statements and other information concerning the
Corporation may also be inspected at the offices of, the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, and the Chicago Stock
Exchange, 440 South LaSalle Street, Chicago, Illinois 60605.
This Prospectus, which constitutes part of a Registration Statement filed
by the Corporation with the Commission under the Securities Act (the
"Registration Statement"), omits certain of the information contained in the
Registration Statement. Reference is made to the Registration Statement and to
the exhibits thereto for further information with respect to the Corporation and
the Shares offered hereby. Copies of such Registration Statement are available
from the Commission. Statements contained herein concerning the provisions of
documents filed herewith as exhibits are necessarily summaries of such
documents, and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed with the Commission.
The Corporation's principal executive offices are located at 300 South St.
Paul Street, Dallas, Texas 75201, and its telephone number at such address is
214-651-8700.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Corporation with the
Commission pursuant to the Exchange Act (File No. 1-3183) and are incorporated
herein by reference.
1. The Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994;
2. The Corporation's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995; and
3. The Corporation's Current Reports on Form 8-K dated May 26, 1995
and May 30, 1995.
All documents filed by the Corporation pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of Shares to be made hereunder shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing thereof. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for all purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Corporation will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated herein or in the
Registration Statement or by reference (other than exhibits and schedules
thereto, unless such exhibits or schedules are specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
telephonic requests for copies should be directed to Mr. M. G. Fortado, Vice
President, Corporate Secretary and Assistant General Counsel, at 300 South St.
Paul Street, Dallas, Texas 75201-5589 (tel. 214-670-2649).
USE OF PROCEEDS
The Corporation will not receive any proceeds from the sale of the Shares
offered hereby.
SELLING STOCKHOLDERS
This Prospectus covers the offer and resale from time to time by each
Selling Stockholder of the Shares owned by each such Selling Stockholder. Set
forth below are the names of each Selling Stockholder, the number of shares of
Common Stock owned as of August 4, 1995, by each Selling Stockholder, the number
of shares of Common Stock that may be offered and sold by such Selling
Stockholder pursuant to this Prospectus and the number of shares of Common Stock
to be owned by each Selling Stockholder upon completion of the offering if all
Shares are sold. Any or all of the shares of Common Stock listed below may be
offered for sale by the Selling Stockholders from time to time.
<TABLE>
<CAPTION>
Common Stock
Ownership of Offered for
Common Stock Selling Ownership of
Prior to Stockholders' Common Stock
Name Offering Account After Offering
---- ------------ ------------- --------------
<S> <C> <C> <C>
Carroll Group, Inc.(1) 647,442 647,442 0
Jonathan P. Carroll 84,287 84,287 0
Apollo Investment 128,237 128,237 0
Fund, L.P.
Savant Enterprises 337,147 337,147 0
Partners, L.P.
Michael C. Gibbs 4,456 4,456 0
Kevin Gates 2,529 2,529 0
-------------
<FN>
(1) Mr. Jonathan P. Carroll and certain trusts established by Mr. Carroll and
his wife own all of the issued and outstanding capital stock of the Carroll
Group, Inc. Mr. Carroll serves as President of Enserch Energy Services,
inc., a wholly owned subsidiary of the Company.
</FN>
</TABLE>
Pursuant to that certain Agreement for Exchange of Stock dated as of
June 29, 1995 (the "Agreement"), the Corporation acquired all of the issued and
outstanding shares of DGS. Each of the Selling Stockholders received the shares
listed as being offered in the table above in exchange for the stock of DGS
owned by such Selling Stockholder. Under the Agreement, the Corporation agreed
to register the Shares under the Securities Act for resale by the former capital
stockholders of DGS. The Corporation will not receive any of the proceeds from
the sale of the Shares by the Selling Stockholders.
PLAN OF DISTRIBUTION
The Common Stock offered hereby may be sold from time to time to purchasers
directly by any of the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer the Common Stock through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of the Common Stock for whom they may act as agent.
The Selling Stockholders and any underwriters, dealers or agents that
participate in the distribution of the Common Stock may be deemed to be
underwriters, and any profit on the sale of the Common Stock by them and any
discounts, commissions or concessions received by any such underwriters, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act. The Corporation, however, understands that the Selling
Stockholders do not admit that they are underwriters within the meaning of the
Securities Act.
The Common Stock may be sold from time to time in one or more transactions
at fixed offering prices, which may be changed, or at varying prices determined
at the time of sale or at negotiated prices. The Corporation will pay all of
the expenses incident to the offering and sale of the Common Stock to the public
other than commissions and discounts of underwriters, dealers or agents,
brokers' fees and the fees and expenses of any counsel to the Selling Stock-
holders related thereto (except that the Corporation will pay for the
reasonable fees of one law firm to represent the former capital stockholders of
DGS in connection with the Registration Statement for which this Prospectus
forms a part, as provided in the Agreement).
The Corporation has agreed to indemnify certain of the Selling Stockholders
and certain of the Selling Stockholders have agreed to indemnify the Corporation
from certain damages or liabilities arising out of or based upon any untrue
statement of a material fact contained in or material omission from the
Registration Statement, to the extent such untrue statement or omission was made
in the Registration Statement in reliance upon information furnished by the
indemnifying party.
LEGAL OPINIONS
The validity of the Shares will be passed upon for the Corporation by
Williams T. Satterwhite, Esquire, Senior Vice President and General Counsel of
the Corporation.
As of July 31, 1995, Mr. Satterwhite owned 30,337 share of Common Stock and
held options to acquire 85,400 shares of Common Stock (of which 74,775 are
presently exercisable) and 10,101 shares of Common Stock which were held for his
account under an employee benefit plan. Mr. Satterwhite also participates in
other employee benefit plans of the Corporation.
EXPERTS
The financial statements and related financial statement schedules
incorporated in this Prospectus by reference from the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in auditing and
accounting.
With respect to the unaudited interim financial information for the period
ended March 31, 1995 and 1994, included in the Corporation's Quarterly Reports
on Form 10-Q which is incorporated herein by reference, Deloitte & Touche LLP
have applied limited procedures in accordance with professional standards for a
review of such information. However, as stated in their report included in the
Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, and incorporated by reference herein, they did not audit and they did not
express an opinion on that interim financial information. Deloitte & Touche LLP
are not subject to the liability provisions of Section 11 of the Securities Act
for their report on the unaudited interim financial information because that
report is not a "report" or a "part" of the Registration Statement prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
The audited consolidated financial statements of DALEN Corporation and its
subsidiaries incorporated herein by reference, to the extent and for the period
indicated in their report, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report. Reference is made to said
report, which includes an explanatory paragraph with respect to the change in
method of accounting for income taxes as of January 1, 1993, as discussed in
Note 2 to the DALEN Corporation Financial Statements.
Certain information with respect to the gas and oil reserves of the
Corporation and its subsidiaries is derived from the reports of DeGolyer and
MacNaughton, independent petroleum consultants, and has been incorporated herein
in reliance upon the authority of such firm as experts.
Information relating to the estimated proved reserves of gas and oil of
DALEN and the related estimates of future net cash flows and present values
thereof for certain periods incorporated herein and in the Notes to the DALEN
Financial Statements included in this Prospectus have been audited by
Netherland, Sewell & Associates, Inc., independent petroleum engineers, and are
included herein and incorporated by reference herein in reliance upon the
authority of such firm as an expert in petroleum engineering.
<PAGE>
<PAGE>
===================================== ======================================
No person has been authorized to give
any information or to make any
representation other than those
contained in this Prospectus, and if
given or made, such information or
representations must not be relied
upon. This Prospectus does not
constitute an offer to sell or a 1,204,098 SHARES
solicitation of an offer to buy any
securities other than registered
securities to which it relates, or an
offer to or a solicitation of any
person in any jurisdiction where such
offer or solicitation would be
unlawful. The delivery of this
Prospectus at any time does not imply
that the information herein is correct ENSERCH CORPORATION
as of any date subsequent to this
date.
Common Stock
---------- ----------
<TABLE> Prospectus
<CAPTION>
TABLE OF CONTENTS ----------
Page
<S> <C>
Available Information. . . . 2
Incorporation of Certain
Documents by Reference. . . 2 August _____, 1995
Use of Proceeds. . . . .. . . 3
Selling Stockholders . .. . . 3
Plan of Distribution . . . . 4
Legal Opinions . . . . . . . 4
Experts. . . . . . . . . . . 5
</TABLE>
===================================== =======================================
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
The estimated expenses to be incurred in connection with the issuance and
distribution of the Common Stock covered by this Registration Statement, all of
which will be paid by ENSERCH Corporation (the "Corporation" or the
"Registrant"), are as follows:
<TABLE>
<S> <C>
Registration Fees. . . . . . . . . . $ 7,370
Accounting Fees and Expenses . . . . . 1,500
Printing Expenses. . . . . . . . . . . 2,000
Miscellaneous. . . . . . . . . . . . . 1,130
-------
Total. . . . . . . . . . . . . . . . $12,000
</TABLE>
ITEM 15. Indemnification of Directors and Officers
Under the Texas Business Corporation Act (the "TBCA"), a Texas corporation
may in general indemnify a director or officer who was, is or is threatened to
be made a named defendant or respondent in a proceeding by virtue of his posi-
tion in the corporation if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and,
in the case of criminal proceedings, had no reasonable cause to believe his
conduct was unlawful. Further, a Texas corporation may indemnify a director or
officer in an action brought by or in the right of the corporation only if such
director or officer was not found liable to the corporation, unless or only to
the extent that a court finds him to be fairly and reasonably entitled to
indemnity for such expenses as the court deems proper, within statutory limits.
The Registrant's Bylaws authorize Registrant to indemnify any person who
(i) is or was a director, officer, employee or agent of Registrant or (ii) while
a director, officer, employee or agent of Registrant, is or was serving at the
request of Registrant as a director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise to the fullest extent that a corporation may
or is required to grant indemnification to a director under the TBCA. Regis-
trant also may indemnify any person to such further extent as permitted by law.
Additionally, Registrant's Restated Articles of Incorporation eliminates
in certain circumstances the monetary liability of directors of Registrant for
an act or omission in the director's capacity as a director. This provision
does not eliminate or limit the liability for (i) a breach of a director's
duty of loyalty to Registrant or its shareholders; (ii) an act or omission not
in good faith or that involves intentional misconduct or a knowing violation of
the law; (iii) a transaction from which the director received an improper bene-
fit, whether or not the benefit resulted from an action taken within the scope
of the director's office; (iv) an act or omission for which the liability of the
director is expressly provided for by statute; or (v) an act related to an
unlawful stock repurchase or payment of a dividend.
The above discussion of the Registrant's Restated Articles of Incorporation
and Bylaws and of the TBCA is not intended to be exhaustive and is qualified in
its entirety by the Restated Articles of Incorporation and Bylaws and the TBCA.
Registrant carries directors' and officers' liability insurance which
insures Registrant's directors and officers against liability for any "wrongful
act" arising out of their position, and which is not reimbursable under the
Registrant's Bylaws or which, if reimbursable, Registrant has not paid or is
unable to pay. These provisions of the policy pertaining to officers and
directors are also subject to several exclusions, including losses covered under
other forms of insurance, losses occasioned by violations of governmental
regulations and ordinances, losses for which insurance would be against public
policy and others recited therein.
<PAGE>
<PAGE>
ITEM 16. Exhibits
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-3, including those incorporated herein by
reference.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
------- -----------------------
<S> <C>
4.1 Restated Articles of Incorporation of Registrant currently in
effect. (Filed as Exhibit 3.1 to the Corporation's Form 10-K for
the year ended December 31, 1994).
4.2 Bylaws of Registrant currently in effect. (Filed as Exhibit 3.2 to
the Corporation's Form 10-K for the year ended December 31, 1994.)
4.3 Shareholder Rights Plan. (Filed as an Exhibit to Registrant's Form
8-A dated April 23, 1986.)
5 Opinion of W. T. Satterwhite, Esq.
10 Agreement for Exchange of Stock.
15 Letter of Deloitte & Touche LLP re interim financial information.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of DeGolyer and MacNaughton.
23.3 Consent of Arthur Andersen LLP.
23.4 Consent of Netherland, Sewell & Associates, Inc.
23.5 Consent of W. T. Satterwhite (included in Exhibit 5 above).
24 Powers of Attorney
</TABLE>
ITEM 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) to file, during the period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (i) and (ii) above do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in this registration
statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the Regis-
trant has been advised that in the opinion of the Securities and Exchange Com-
mission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Dallas, State of Texas, on the 7th day of August,
1995.
ENSERCH CORPORATION
By: /s/ D. W. Biegler
-----------------------------
D. W. Biegler
Chairman and President
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ D. W. Biegler* Chairman and President, August 7 , 1995
------------------------ Director -----
D. W. Biegler
/s/ Frederick S. Addy* Director August 7 , 1995
------------------------ -----
Frederick S. Addy
/s/ B. A. Bridgewater, Jr.* Director August 7 , 1995
------------------------ -----
B. A. Bridgewater, Jr.
/s/ Odie C. Donald* Director August 7 , 1995
------------------------ -----
Odie C. Donald
/s/ Marvin J. Girouard* Director August 7 , 1995
------------------------ -----
Marvin J. Girouard
Director August , 1995
------------------------ -----
J. M. Haggar, Jr.
/s/ Thomas W. Luce, III* Director August 7 , 1995
------------------------ -----
Thomas W. Luce, III
/s/ W. C. McCord* Director August 7 , 1995
------------------------ -----
W. C. McCord
/s/ Diana Natalicio* Director August 7 , 1995
------------------------ -----
Diana Natalicio
/s/ S. R. Singer* Senior Vice President, August 7 , 1995
------------------------ Finance and Corporate -----
S. R. Singer Development, Chief
Financial Officer
/s/ J. W. Pinkerton* Vice President and August 7 , 1995
------------------------ Controller, Chief -----
J. W. Pinkerton Accounting Officer
*/s/ D. W. Biegler
---------------------------
D. W. Biegler, Individually
and as Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT 5
ENSERCH Corporation
ENSERCH Center
300 South St. Paul W. T. Satterwhite
Dallas, Texas 75201 Senior Vice President
Telephone 214/651-8700 and General Counsel
August 7, 1995
ENSERCH Corporation
ENSERCH Center
300 South St. Paul
Dallas, Texas 75201
Gentlemen:
This opinion is delivered in connection with the Registration Statement
(the "Registration Statement") on Form S-3 filed with the Securities and
Exchange Commission by ENSERCH Corporation, a Texas corporation (the
"Corporation"), under the Securities Act of 1933, as amended (the "Act"),
relating to 1,204,098 shares of the Corporation's common stock, par value $4.45
per share (the "Shares"), issuable pursuant to the Agreement for Exchange of
Stock dated June 29, 1995.
I am familiar with the Restated Articles of Incorporation and Bylaws of the
Corporation as currently in effect. In addition, I have examined such corporate
records, documents and other instruments and have made such other examinations
and inquiries as we have deemed necessary to enable us to express the opinions
set forth herein.
Based upon the foregoing, subject to the qualifications and limitations
stated herein, and limited in all respects to the laws of the State of Texas and
the laws of the United States of America, I am of the opinion that the Shares
have been duly authorized, validly issued, fully paid and nonassessable.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and the use of my name under the caption "Legal Opinions"
in the Prospectus forming a part of this Registration Statement.
Very truly yours,
/s/ W. T. Satterwhite
W.T. Satterwhite
EXHIBIT 10
AGREEMENT FOR EXCHANGE OF STOCK
This Agreement for Exchange of Stock (this "Agreement"), dated as of
June 29, 1995, among ENSERCH Corporation, a Texas corporation ("ENSERCH"),
Jonathan P. Carroll ("Carroll"), Carroll Group, Inc., a California corporation
("Carroll Group"), the Jonathan Pitts Carroll 1995 Grantor Annuity Trust, the
Gina Leanne Carroll 1995 Grantor Annuity Trust, the Jonathan and Gina Carroll
1995 Family Trust (the three preceding trusts are, collectively, the "Trusts"),
Apollo Investment Fund, L.P., a Delaware limited partnership ("Apollo"), Savant
Enterprises Partners, L.P., a Delaware limited partnership ("Savant"), Michael
C. Gibbs ("Gibbs"), Kevin Gates ("Gates") (Carroll, Carroll Group and the Trusts
are, collectively, the "Management Stockholders") (Apollo, Savant, Gibbs and
Gates are, collectively, the "Nonmanagement Stockholders") (the Management
Stockholders and the Nonmanagement Stockholders are, collectively, the
"Stockholders") and DGS Holdings Corp., a Delaware corporation (the "Company"),
W I T N E S S E T H:
WHEREAS, the Stockholders collectively hold all of the issued and
outstanding shares of capital stock (the "Stock") and warrants to purchase
shares of capital stock of the Company and desire to exchange the Stock for
stock of ENSERCH as set forth herein;
NOW, THEREFORE, in consideration of the mutual representations, warranties
and covenants herein contained, and on the terms and subject to the conditions
herein set forth, the parties hereto hereby agree as follows:
ARTICLE I.
Definitions
Section 1.01. Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
(a) "Affiliate" shall mean a family member of, or a person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the person in question.
(b) "best knowledge", "have no knowledge of", or "do not know of" and
similar phrases shall mean (i) with respect to the Management Stockholders or
the Company (A) in the case of a natural person, the particular fact was known,
or not known, as the context requires, to such person after due inquiry by such
person, (B) in the case of an entity other than the Trusts, the particular fact
was known, or not known, as the context requires, to any employee of such entity
with management responsibilities of such entity after due inquiry by the
principal executive officer of such entity and (C) in the case of a Trust, the
particular fact was known, or not known, as the context requires, to Carroll
after due inquiry by him; and (ii) with respect to the Nonmanagement Stock-
holders (A) in the case of a natural person, the particular fact was known, or
not known, as the context requires, to such person and (B) in the case of an
entity, the particular fact was known, or not known, as the context requires, to
any employee of such entity with management responsibilities of such entity.
(c) "Carroll Transfer" shall mean a transfer of 400 shares of the Common
Stock of Carroll Group by Jonathan Carroll in the aggregate to the Jonathan
Pitts Carroll 1995 Grantor Annuity Trust, the Gina Leanne Carroll 1995 Grantor
Annuity Trust and the Jonathan and Gina Carroll 1995 Family Trust.
(d) "Cash Compensation" shall have the meaning set forth in
Section 9.06(a).
(e) "Closing" shall mean the closing of the transactions contemplated by
this Agreement, which shall occur at 10:00 a.m., local time, on the Closing Date
in the offices of Jackson & Walker, L.L.P., 901 Main Street, Suite 6000, Dallas,
Texas 75202, or at such other time and place as shall be mutually agreed in
writing by the parties hereto.
(f) "Closing Date" shall mean five days following the date on which all
of the conditions set forth in Articles VII and VIII are satisfied or waived or
such other date as may be mutually agreed in writing by the parties hereto.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Commitments" shall have the meaning set forth in Section 9.10(a).
(i) "Common Stock" shall have the meaning set forth in Section 3.03.
(j) "Compensation Plans" shall have the meaning set forth in
Section 9.06(b).
(k) "Confidential Information" shall have the meaning set forth in
Section 5.16.
(l) "Confidentiality Agreement" shall have the meaning set forth in
Section 6.03.
(m) "Controlled Group" shall have the meaning set forth in
Section 9.07(g).
(n) "Damages" shall have the meaning set forth in Section 12.01.
(o) "Due Diligence Completion Notice" shall have the meaning set forth
in Article IX.
(p) "Due Diligence Conditions" shall have the meaning set forth in
Article IX.
(q) "Earnings Release" shall have the meaning set forth in Section 5.14.
(r) "Employee Benefit Plans" shall have the meaning set forth in
Section 9.07(a).
(s) "Employee Policies and Procedures" shall have the meaning set forth
in Section 9.06(d).
(t) "Employment Agreements" shall have the meaning set forth in
Section 9.06(c).
(u) "ENSERCH Common Stock" shall mean common stock, par value $4.45 per
share, of ENSERCH.
(v) "ENSERCH Shares" shall mean the shares of ENSERCH Common Stock issued
to the Stockholders pursuant to Section 2.01.
(w) "Environmental Laws" shall have the meaning set forth in
Section 9.30(a).
(x) "ERISA" shall have the meaning set forth in Section 9.07(a).
(y) "Financial Statements" shall have the meaning set forth in
Section 9.04.
(z) "Fixed Assets" shall have the meaning set forth in Section 9.20.
(aa) "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.
(bb) "Key Employees" shall mean each of Carroll and Larry Horan.
(cc) "ordinary course of business" means the usual and customary way in
which the Company or any Subsidiary, as the case may be, has conducted its
business in the past.
(dd) "Personal Property" shall have the meaning set forth in
Section 9.09(b).
(ee) "Preferred Stock" shall have the meaning set forth in Section 3.03.
(ff) "Proprietary Rights" shall have the meaning set forth in
Section 9.13(a).
(gg) "Real Property" shall have the meaning set forth in Section 9.09(a).
(hh) "Redemption" shall have the meaning set forth in Section 7.11.
(ii) "Registration Rights Agreement" shall have the meaning set forth in
Section 10.02(h).
(jj) "Securities Act" shall have the meaning set forth in Section 3.06.
(kk) "Stock" shall mean all of the outstanding shares of capital stock of
the Company other than the 40,000 issued and outstanding shares of Preferred
Stock.
(ll) "Stockholders' Agreement" shall mean the Shareholders Agreement dated
as of February 22, 1991, among the Company and its stockholders.
(mm) "Subsidiary" shall mean any corporation, limited liability company,
partnership, joint venture or other legal entity of which the Company owns,
directly or indirectly, at least 50% of the stock or other equity interests the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity; and
shall include within the meaning of the term each Subsidiary, as defined above,
of any Subsidiary of the Company. The term "Subsidiary" shall not include any
entity, or any interest in any entity, that is disposed of pursuant to Section
7.12 prior to the Closing.
(nn) "Warrants" shall mean the 49,303 warrants to purchase Common Stock
owned by Savant.
ARTICLE II.
The Exchange
Section 2.01. Exchange of Shares. Subject to and upon the terms and
conditions contained herein, at the Closing, all the issued and outstanding
shares of Common Stock, which will constitute all of the capital stock of the
Company at the Closing, will be exchanged for 1,204,098 shares of ENSERCH Common
Stock. Each Stockholder will receive that number of shares of ENSERCH Common
Stock set forth on Exhibit 2.01.
In case ENSERCH shall at any time after the date of this Agreement and
prior to the Closing (i) declare a dividend on ENSERCH Common Stock payable in
shares of ENSERCH Common Stock, (ii) subdivide the outstanding ENSERCH Common
Stock into a greater number of shares, (iii) combine the outstanding ENSERCH
Common Stock into a lesser number of shares or (iv) issue any shares of its
capital stock in a reclassification of the ENSERCH Common Stock (including any
such reclassification in connection with a consolidation or merger), the number
of shares of ENSERCH Common Stock to be issued to the Stockholders pursuant to
the preceding paragraph shall be proportionately adjusted so that the
Stockholders would be entitled to receive at the Closing the aggregate number
and kind of shares of ENSERCH capital stock that they would have held on the
actual Closing Date if the Closing had occurred on the date of this Agreement.
Section 2.02. Characterization of Exchange. The Stockholders and ENSERCH
agree that the exchange contemplated by this Agreement is intended to qualify as
the first step in a tax free reorganization within the meaning of Section
368(a)(1)(C) with respect to the transfer of the Stock held by Carroll Group.
ARTICLE III.
Representations and Warranties
of the Company and the Stockholders
The Management Stockholders, as to themselves and the Company, and the
Company represent and warrant that the following representations and warranties
are true and correct as of the date hereof and shall be true and correct through
the Closing Date as if made on that date. The Nonmanagement Stockholders, as to
themselves severally, represent and warrant that (i) with regard to Sections
3.01, 3.05(b), 3.06, 3.07, 3.08 and 3.12, the representations and warranties
made by each of the Nonmanagement Stockholders therein are true and correct as
of the date hereof and shall be true and correct through the Closing Date as if
made on that date and (ii) with regard to Sections 3.02, 3.03, 3.04, 3.05(a),
3.09, 3.10 and 3.11, to their knowledge, the representations and warranties
contained therein are true and correct as of the date hereof and shall be true
and correct through the Closing Date as if made on that date. The Trusts, Gibbs
and Gates, as to themselves severally, represent and warrant that the
representations and warranties made by each of them in Section 3.13 are true and
correct as of the date hereof and shall be true and correct through the Closing
Date as if made on that date.
Section 3.01. Ownership of the Stock. Each Stockholder severally
represents and warrants that, on the date of this Agreement, it owns,
beneficially and of record, except as noted on Exhibit 3.01(a), title to the
issued and outstanding shares of Common Stock and the issued and outstanding
shares of Preferred Stock attributed to it on Exhibit 3.01(a) (assuming that the
exercise of the Warrants has not taken place), free and clear of all security
interests, liens, adverse claims, encumbrances, equities, proxies, options or
stockholders' agreements, except the Stockholders' Agreement. Savant represents
and warrants that, on the date of this Agreement, Savant owns the Warrants free
and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or stockholders' agreements, except the Stockholders'
Agreement. Each Stockholder severally represents and warrants that, at the
Closing, it shall convey to ENSERCH title to the number of shares of Common
Stock attributed to it on Exhibit 3.01(b) (assuming the previous exercise of
the Warrants), free and clear of any security interests, liens, adverse claims,
encumbrances, equities, proxies, options, stockholders' agreements or restric-
tions. Each Stockholder severally represents and warrants that, except for this
Agreement, the Warrants, the Preferred Stock and the Stockholders' Agreement, it
is not a party to or bound by, nor does it have any knowledge of, any agreement,
instrument, arrangement, contract, obligation, commitment or understanding of
any character, whether written or oral, express or implied, relating to the
sale, assignment, encumbrance, conveyance, transfer or delivery of any capital
stock of the Company.
Section 3.02. Organization and Good Standing; Qualification; Permits. The
Company and each of the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation, with
all requisite corporate power and authority to carry on the business in which it
is engaged, to own the properties it owns, to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The Company and each of
the Subsidiaries is duly qualified and licensed to do business and is in good
standing in all jurisdictions where the nature of its business or any state or
local governmental authorities' requirement makes such qualification necessary,
which jurisdictions are listed on Exhibit 3.02, except where the failure to be
qualified or licensed would not have a material adverse effect on the business
of the Company. The Company and the Subsidiaries do not have any assets,
employees or offices in any state other than the states listed on Exhibit 3.02.
The Company and each of the Subsidiaries has obtained or duly applied for all
material licenses, permits and certificates from government agencies and
authorities that are necessary to the conduct of its business or required by any
state or local authority as a result of the Company's or the Subsidiary's
business, and the consummation of the transactions contemplated hereby will not
result in the loss or impairment of, or any default under, any such license,
permit or certificate. DGS/IESCO Inc. does not own any assets and does not
conduct any business.
Section 3.03. Capitalization. On the date of this Agreement, the
authorized capital stock of the Company consists of (i) 200,000 shares of common
stock, par value $.01 per share (the "Common Stock"), of which 91,572.36 shares
are issued and outstanding, and (ii) 45,000 shares of preferred stock, par value
$.01 per share (the "Preferred Stock"), of which 40,000 shares have been
designated Series A 12% Cumulative Redeemable Preferred Stock and are issued and
outstanding. On the date of this Agreement, 8,427.64 shares of Common Stock and
no shares of Preferred Stock are held in the treasury of the Company. At the
Closing, the authorized capital stock of the Company will consist of (i) 200,000
shares of Common Stock, of which the number of shares set forth on Exhibit
3.01(b) will be issued and outstanding, and (ii) 45,000 shares of Preferred
Stock, of which no shares will be issued and outstanding. At the Closing, no
shares of Common Stock or Preferred Stock will be held in the treasury of the
Company. All of the issued and outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and nonassessable.
Except for the Warrants, on the date of this Agreement, there exist no options,
warrants, subscriptions or other rights to purchase, or securities convertible
into or exchangeable for, the capital stock of the Company. At the Closing, no
options, warrants, subscriptions or other rights to purchase, or securities
convertible into or exchangeable for, the capital stock of the Company will
exist. Except for this Agreement, the Stockholders' Agreement, the Warrants and
the redemption of the Preferred Stock, the Company is not a party to or bound
by, nor does it have any knowledge of, any agreement, instrument, arrangement,
contract, obligation, commitment or understanding of any character, whether
written or oral, express or implied, relating to the sale, assignment,
encumbrance, conveyance, transfer or delivery of any capital stock of the
Company. No shares of capital stock of the Company have been issued or disposed
of in violation of the preemptive rights of any of the Company's stockholders.
All accrued dividends on the capital stock of the Company, whether or not
declared, have been paid in full, except for $18,666.62 in accrued dividends on
the Preferred Stock as of June 29, 1995, plus dividends accruing on such
Preferred Stock after June 29, 1995, at a rate of $1,333.33 per day until the
Preferred Stock is redeemed in accordance with Section 7.11.
Section 3.04. Corporate Records. The copies of the Certificate of
Incorporation and all amendments thereto and the Bylaws of the Company and the
Subsidiaries that ENSERCH has been afforded an opportunity to inspect, are true,
correct and complete copies thereof, as in effect on the date hereof. The
minute books of the Company and the Subsidiaries, copies of which ENSERCH has
had an opportunity to inspect, contain accurate minutes of all meetings of, and
accurate consents to all actions taken without meetings by, the Board of
Directors (and any committees thereof) and the stockholders of the Company and
the Subsidiaries since the formation of the Company and the Subsidiaries.
Copies of all the documents referred to in this Section 3.04 will be delivered
to ENSERCH at the Closing.
Section 3.05. Authorization and Validity.
(a) The execution, delivery and performance by the Company of this
Agreement and the other agreements contemplated hereby, and the
consummation of the transactions contemplated hereby and thereby, have
been duly authorized by the Company. This Agreement has been duly
executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies. The agreements
contemplated hereby will be as of the Closing Date duly executed and
delivered by the Company and will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies. The transfer of the
Stock by the Stockholders to ENSERCH as contemplated herein will not
impair the ability or authority of the Company to carry on its business as
now conducted in any respect.
(b) Each Stockholder severally represents and warrants that its
execution, delivery and performance of this Agreement and the other
agreements contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby, has been duly authorized by it. Each
Stockholder severally represents and warrants that this Agreement has been
duly executed and delivered by it or him and constitutes a legal, valid
and binding obligation of that Stockholder, enforceable against the
Stockholder in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally or the availability of equitable remedies. Each
Stockholder severally represents and warrants that the agreements
contemplated hereby will be as of the Closing Date duly executed and
delivered by it or him and will constitute legal, valid and binding
obligations of that Stockholder, enforceable against the Stockholder in
accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally or the availability of equitable remedies.
Section 3.06. Registration. Each Stockholder understands and agrees that
it or he must bear the economic risk of the acquisition of the ENSERCH Shares to
be acquired by it or him for an indefinite period of time because the resale by
that Stockholder of the ENSERCH Shares received by it or him has not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state securities laws and the ENSERCH Shares are instead being offered
and sold in reliance on an exemption from such registration; except that the
parties to this Agreement intend that the ENSERCH Shares be registered pursuant
to the Registration Rights Agreement and that the ENSERCH Shares so registered
may be immediately sold after the completion of such registration.
Section 3.07. Acquisition for Account. Each Stockholder severally
represents and warrants that all of the ENSERCH Shares acquired by it or him are
being acquired solely for its or his own account, for investment, and not with
a view to, or resale in connection with, any distribution, subdivision or
fractionalization thereof in violation of the Securities Act, and such
Stockholder has no present plans to enter into an contract, undertaking,
agreement or arrangement with respect to any resale of the ENSERCH Shares;
except that the parties to this Agreement intend that the offer and sale of the
ENSERCH Shares be registered pursuant to the Registration Rights Agreement and
that the offering and sale of the ENSERCH Shares so registered may be effected
immediately after the completion of such registration.
Section 3.08. Accredited Investor. Each of Carroll Group, Carroll, Savant
and Apollo severally represents that it or he is an "Accredited Investor" within
the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act.
Section 3.09. Damages Related to Oil and Gas Interests. Neither the
Company nor any Subsidiary is subject to any Damages with regard to a working
interest in an oil or gas property owned by the Company or any Subsidiary,
whether such working interest is owned directly or indirectly (through a limited
or general partnership or otherwise), except for liabilities disclosed in the
Financial Statements or customary operating expenses charged by the operator
pursuant to a joint operating agreement.
Section 3.10. Taxes.
(a) Filing of Tax Returns. Except as set forth on Exhibit
9.15(c), the Company and each Subsidiary have duly and timely filed or
shall duly and timely file (in accordance with any extensions duly granted
by the appropriate governmental agency, if applicable) with the
appropriate governmental agencies all returns (including information
returns) and reports, including all schedules or attachments thereto,
required by the United States or any state or any political subdivision
thereof or any foreign jurisdiction to be filed on or before the Closing
Date by the Company and each Subsidiary in connection with any tax ("Tax
Returns"). Except as set forth on Exhibit 9.15(c), all such Tax Returns
are, or shall be, complete and accurate and properly reflect the taxes of
the Company and each Subsidiary for the periods covered hereby.
(b) Payment of Taxes. Except as set forth on Exhibit 9.15(c), the
Company and each Subsidiary have paid or accrued all taxes that have
become due with respect to any Tax Returns that they have filed or are
required to have filed with respect of its business activities through the
Closing Date.
(c) No Pending Deficiencies, Delinquencies, Assessments or Audits.
Except as set forth on Exhibit 9.15(c), no tax deficiency or delinquency
has been asserted against the Company or any Subsidiary; there is no
unpaid assessment, proposal for additional taxes, deficiency or
delinquency in the payment of any of the taxes of the Company or any
Subsidiary that, to the knowledge of the Company, any Subsidiary or the
Stockholders, could be asserted by any tax authority; there is no tax
authority audit of the Company or any Subsidiary pending and the results
of any completed audits are properly reflected in the Financial
Statements; and there are no pending claims for refund of taxes filed by
the Company or any Subsidiary.
(d) Tax Liens. There are no liens for taxes upon any assets of
the Company or any Subsidiary other than statutory liens for taxes not yet
delinquent.
(e) All Withholding Requirements Satisfied. All monies required
to be withheld by the Company and each Subsidiary and paid to governmental
agencies for all taxes (including any amounts required to be withheld
pursuant to Sections 1441 through 1446 of the Code) have been (i)
collected or withheld and either paid to the respective governmental
agencies or set aside in accounts for such purpose or (ii) properly
reflected in the Financial Statements.
(f) Request for Rulings. There are no outstanding requests for
rulings with any tax or revenue authority that would have a material
adverse effect on the operations of the Company and its Subsidiaries.
(g) Partnerships. Except as set forth on Exhibit 9.15(g), neither
the Company nor any Subsidiary owns any interest in any entity that is
characterized as a partnership under the Code.
(g) Accrued Taxes. The Financial Statements reflect all tax
liabilities of the Company and the Subsidiaries, accrued, contingent or
otherwise (known or unknown and asserted or unasserted), arising prior to
the date of this Agreement.
Section 3.11. Subsidiaries. The Company does not own, directly or
indirectly, any of the capital stock of any other corporation or any equity,
profit sharing, participation or other interest in any corporation, partnership,
joint venture or other entity, except the Subsidiaries and other entities listed
on Exhibit 9.01. The authorized and issued capital stock of each Subsidiary is
set forth on Exhibit 9.01. All of the issued and outstanding shares of capital
stock of each Subsidiary are duly authorized, validly issued, fully paid and
nonassessable and are owned by the Company free and clear of all security
interests, liens, adverse claims, encumbrances, equities, proxies, options or
stockholders' agreements. Except as set forth on Exhibit 9.01, there are in
existence no options, warrants or similar rights granted by any Subsidiary, or
any agreements to which any Subsidiary is a party, for the issuance or sale by
it of any securities except to the Company.
Section 3.12. Pooling of Interests. Each Stockholder severally represents
and warrants that it or he has not made changes in its or his Stock equity
interest in contemplation of the transactions contemplated by this Agreement
other than as a result of the exercise of the Warrants by Savant, the Carroll
Transfer or the Redemption.
Section 3.13. The Trusts, Gibbs and Gates Investment Representations.
Each of Gibbs, Gates and each of the Trusts has received a copy of the ENSERCH
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, and all
other documents filed subsequent to December 31, 1994, under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
(including without limitation, its Form 10-Q for the quarter ended March 31,
1995, and its Proxy Statement for its annual Shareholders meeting dated
March 24, 1995), each in the form (excluding exhibits) filed with the SEC
(collectively the "Reports"). Each of Gibbs, Gates and each of the Trusts
acknowledges it has received and reviewed this Agreement and the Reports
and other documents referred to herein and has been given the opportunity
to obtain any additional information or documents and to ask questions
and receive answers about such documents. Each of Gibbs, Gates and
each of the Trusts has carefully reviewed and fully understands
the nature and risks of, and other considerations relating to, the
issuance of the ENSERCH Shares pursuant to this Agreement. Each of
Gibbs, Gates and each of the Trusts has received only the Reports and
the documents attached as exhibits hereto and the other documents that
ENSERCH may have provided at the specific request of any of Gibbs, Gates
or any of the Trusts, and has received no other literature from ENSERCH.
Each of Gibbs, Gates and each of the Trusts acknowledges that, except as
set forth in this Agreement and the exhibits hereto, no representations or
warranties have been made to such Stockholder by ENSERCH or by any person
acting on behalf of ENSERCH with respect to the business or financial
condition of ENSERCH.
ARTICLE IV.
Representations and Warranties of ENSERCH
ENSERCH represents and warrants that the following are true and correct as
of the date hereof and shall be true and correct through the Closing Date as if
made on that date:
Section 4.01. Organization and Good Standing. ENSERCH is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation, with all requisite corporate power and authority to
carry on the business in which it is engaged, to own the properties it owns, to
execute and deliver this Agreement and to consummate the transactions contem-
plated hereby.
Section 4.02. Authorization and Validity. The execution, delivery and
performance by ENSERCH of this Agreement has been and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby, have been or shall be as of the Closing Date duly authorized
by ENSERCH. This Agreement and each other agreement contemplated hereby has
been or shall be as of the Closing Date duly executed and delivered by ENSERCH
and constitutes or shall constitute legal, valid and binding obligations of
ENSERCH, enforceable against ENSERCH in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or the availability of equitable remedies.
Section 4.03. No Violation. Neither the execution, delivery or per-
formance of this Agreement or the other agreements contemplated hereby nor the
consummation of the transactions contemplated hereby or thereby shall (i)
conflict with, or result in a violation or breach of the terms, conditions and
provisions of, or constitute a default under, the Articles of Incorporation or
Bylaws of ENSERCH or any agreement, indenture or other instrument under which
ENSERCH is bound or (ii) violate or conflict with any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over ENSERCH or the properties or
assets of ENSERCH.
Section 4.04. Finder's Fee. ENSERCH has not incurred any obligation for
any finder's, broker's or agent's fee in connection with the transactions
contemplated hereby, except a fee payable to Regency Gas Company, for which
ENSERCH shall be solely responsible.
Section 4.05. ENSERCH Shares. The issuance of the ENSERCH Shares has
been duly authorized by all necessary action on the part of the Board of
Directors of ENSERCH and the ENSERCH Shares, when issued in accordance with the
terms of this Agreement, shall be validly issued, fully paid and nonassessable.
The Stockholders shall own the ENSERCH Shares free and clear of all security
interests, liens, adverse claims, encumbrances, equities, proxies, options or
stockholders' agreements.
Section 4.06. Consents. Except as set forth on Exhibit 4.06, no consent,
authorization, approval, permit or license of, or filing with, any governmental
or public body or authority, any lender or lessor or any other person or entity
is required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement or the agreements contemplated hereby
on the part of ENSERCH.
Section 4.07. Governing Documents. ENSERCH has delivered or made
available to the Stockholders true, accurate and complete copies of ENSERCH's
Articles of Incorporation and Bylaws in effect as of the date hereof.
Section 4.08. Continuation of the Company's Business. ENSERCH currently
has no plan or intention to (i) liquidate the Company; (ii) merge the Company
with or into or otherwise combine the Company with another corporation other
than a direct wholly-owned subsidiary of ENSERCH; (iii) sell or otherwise dis-
pose of the stock of the Company or (iv) cause the Company to sell or otherwise
dispose of any of the assets of the Company except for dispositions made in the
ordinary course of business.
ARTICLE V.
The Stockholders' and the Company's Covenants
The Management Stockholders jointly and severally agree and covenant that
between the date hereof and the Closing they and the Company will be bound by
the covenants contained in this Article V. The Company agrees and covenants
that between the date hereof and the Closing, it will be bound by the covenants
contained in this Article V. The Nonmanagement Stockholders severally agree and
covenant that between the date hereof and the Closing they will not approve or
consent to any action in violation of any of the covenants contained in this
Article V.
Section 5.01. Consummation of Agreement. The Company and the
Stockholders shall use their best efforts to cause the consummation of the
transactions contemplated hereby in accordance with their terms and conditions.
Section 5.02. Business Operations. The Company and the Subsidiaries shall
operate their businesses in the ordinary course and shall not introduce any
new method of management or operation. The Company and the Stockholders shall
use their best efforts to preserve the business of the Company and the
Subsidiaries intact, to retain the present customers and suppliers so that they
shall continue to be such after the Closing. None of the Company, any Subsid-
iary or the Stockholders shall take any action that could adversely affect the
condition (financial or otherwise), operations, assets, liabilities, business or
prospects of the Company or any Subsidiary without the prior written consent of
ENSERCH or take or fail to take any action that would (i) cause or permit the
representations and warranties made in Article III to be inaccurate at the time
of Closing, (ii) preclude the Company and the Stockholders from making such
representations and warranties at the Closing or (iii) cause the Due Diligence
Conditions not to be true.
Section 5.03. Access. The Company and the Stockholders shall permit
ENSERCH and its authorized representatives full access to, and make available
for inspection, all of the assets and business of the Company and the Subsidia-
ries, including their respective employees, customers and suppliers, and permit
ENSERCH and its authorized representatives to inspect and make copies of all
documents, records and information with respect to the affairs of the Company
and the Subsidiaries as ENSERCH and its representatives may request, all for the
sole purpose of permitting ENSERCH to become familiar with the business and
assets and liabilities of the Company and the Subsidiaries.
Section 5.04. Material Change. The Company and the Stockholders shall
promptly inform ENSERCH in writing of any material adverse change in the
condition (financial or otherwise), operations, assets, liabilities, business or
prospects of the Company or any Subsidiary.
Section 5.05. Approvals of Third Parties. The Company and the Stock-
holders shall use their best efforts to secure, as soon as practicable after
the date hereof, all necessary approvals and consents of third parties to the
consummation of the transactions contemplated hereby.
Section 5.06. Employee Matters. Neither the Company nor any Subsidiary
shall, without the prior written approval of ENSERCH, except as required by law:
(a) increase the Cash Compensation of any employee of the Company or any
Subsidiary;
(b) adopt, amend or terminate any Compensation Plan;
(c) adopt, amend or terminate any Employment Agreement;
(d) adopt, amend or terminate any Employee Policies and Procedures;
(e) institute, settle or dismiss any employment litigation;
(f) enter into, modify, amend or terminate any agreement with any union,
labor organization or collective bargaining unit; or
(g) take or fail to take any action with respect to any past or present
employee of the Company or any Subsidiary that could adversely affect the
business of the Company or any Subsidiary.
Section 5.07. Employee Benefit Plans. Neither the Company nor any
Subsidiary shall, without the prior written approval of ENSERCH, except as
required by law:
(a) adopt, amend or terminate any Employee Benefit Plan;
(b) take any action that would deplete the assets of any Employee
Benefit Plan, other than payment of benefits in the ordinary course to
participants and beneficiaries;
(c) fail to pay any premium or contribution due or with respect to any
Employee Benefit Plan;
(d) fail to file any return or report with respect to any Employee
Benefit Plan; or
(e) take or fail to take any action that could adversely affect any
Employee Benefit Plan.
Section 5.08. Contracts. Except with ENSERCH's prior written consent or
as required by the last sentence of Section 7.08, neither the Company nor any
Subsidiary shall waive any right or cancel any contract, debt or claim nor
assume or enter into any contract, lease, license, obligation, indebtedness,
commitment, purchase or sale except in the ordinary course of business.
Section 5.09. Capital Assets; Payments of Liabilities. Neither the
Company nor any Subsidiary shall, without the prior written approval of ENSERCH
(i) acquire or dispose of any capital asset having an initial cost of $50,000 or
more or (ii) discharge or satisfy any lien or encumbrance or pay or perform any
obligation or liability other than (a) liabilities and obligations reflected in
the Financial Statements or (b) current liabilities and obligations incurred in
the ordinary course of business since March 31, 1995, and, in either case (a) or
(b) above, only as required by the express terms of the agreement or other
instrument pursuant to which the liability or obligation was incurred.
Section 5.10. Mortgages, Liens and Guaranties. Neither the Company nor
any Subsidiary shall, without the prior written approval of ENSERCH, enter into
or assume any mortgage, pledge, conditional sale or other title retention
agreement, permit any security interest, lien, encumbrance or claim of any kind
to attach to any of its assets, whether now owned or hereafter acquired, or
guarantee or otherwise become contingently liable for any obligation of another,
except obligations arising by reason of endorsement for collection and other
similar transactions in the ordinary course of business, or make any capital
contribution or investment in any corporation, business or other person.
Section 5.11. No Negotiation with Others. Neither the Company nor the
Stockholders shall, and no Subsidiary shall be permitted to, solicit or
participate in negotiations with (and the Company and the Stockholders shall use
their best efforts to prevent any Affiliate, stockholder, director, officer,
employee or other representative or agent of the Company from negotiating with,
soliciting or participating in negotiations with) any third party with respect
to the sale of the business of the Company or any Subsidiary or any transaction
inconsistent with those contemplated hereby.
Section 5.12. HSR Act. The Company and the Stockholders shall use their
best efforts to file as soon as possible, and to effect early termination of all
applicable waiting periods, under the HSR Act, including without limitation
complying promptly with all requests thereunder for additional information.
Section 5.13. Distributions and Repurchases. No distribution, payment or
dividend of any kind shall be declared or paid by the Company or any Subsidiary,
nor shall any repurchase of any of the Stock be approved or effected, except for
the redemption of the Preferred Stock as required by Section 7.11 and the
distribution of interests in public utility companies required by Section 7.12.
Section 5.14. Pooling of Interests. Except for the Redemption, the
Carroll Transfer and the exercise of the Warrants by Savant, each Stockholder
severally agrees not to directly or indirectly sell, transfer, assign or dispose
of or in any other way reduce his or its risk relative to any ENSERCH Shares to
be received in the business combination contemplated by this Agreement until
such time as financial results covering at least 30 days of post-Closing com-
bined operations of ENSERCH and the Company have been published in a press
release (the "Earnings Release"). Each Stockholder severally agrees not to make
changes in its or his Stock equity interest in contemplation of effecting the
transactions contemplated by this Agreement other than as a result of the
exercise of the Warrants by Savant, the Carroll Transfer or the Redemption.
Section 5.15. Corporate Records. The Company and the Stockholders will
not amend the Certificate of Incorporation or the Bylaws of the Company or any
of the Subsidiaries. The Company and the Stockholders will deliver to ENSERCH
at or prior to the Closing copies of the minutes of all meetings of, and
accurate consents to all actions taken without meetings by, the Board of
Directors (and any committees thereof) and the stockholders of the Company and
the Subsidiaries since the date of this Agreement.
Section 5.16. Confidentiality Agreement. ENSERCH and its subsidiaries and
Affiliates have provided certain information, which information is non-public,
confidential or proprietary in nature (the "Confidential Information"), to the
Company and the Management Stockholders in connection with the transaction
contemplated by this Agreement and the subsequent combined business of ENSERCH
and the Company. The Company and the Management Stockholders agree not to, and
to cause their financial advisors, agents, directors, officers, employees and
representatives (collectively, the "Representatives") not to, use any of the
Confidential Information for any purpose other than evaluating the possibility
of the proposed transaction. The Company and the Management Stockholders agree
that the Confidential Information will not be used by the Company, the
Management Stockholders or the Representatives in any way which is to the
competitive disadvantage or otherwise detrimental to ENSERCH or its subsidiaries
or Affiliates and that such information will be kept strictly confidential by
the Company, the Management Stockholders and the Representatives; provided that
(i) any of such information may be disclosed to such of the Representatives who
need to know such information for the purpose of evaluating the proposed
transaction (it being understood that such Representatives shall be informed by
the Company and the Management Stockholders to treat such information confiden-
tially), and (ii) any disclosure of such information may be made to which
ENSERCH shall expressly consent in writing. In the event this Agreement is
terminated after the Company, the Management Stockholders or the Representatives
have been furnished with or obtained Confidential Information, the Company, the
Management Stockholders and the Representatives will promptly upon the request
of ENSERCH return or destroy all of the Confidential Information. The term
"Confidential Information" does not include information which (i) becomes
generally available to the public other than as a result of a disclosure by the
Company, the Management Stockholders or the Representatives, (ii) was available
to the Company and the Management Stockholders on a non-confidential basis prior
to its disclosure to the Company, the Management Stockholders or the Representa-
tives by ENSERCH or its subsidiaries or Affiliates, (iii) becomes available to
the Company and the Management Stockholders on a non-confidential basis from a
source other than ENSERCH or its subsidiaries, Affiliates or their representa-
tives, provided that such source is not bound by a confidentiality agreement
with ENSERCH or its subsidiaries, Affiliates or their representatives or (iv) is
required to be disclosed by applicable law or regulation or judicial or regu-
latory process after reasonable measures have been taken by the Company and the
Management Stockholders to maintain confidentiality and after they have given
reasonable notice to ENSERCH specifying the information involved and the manner
and extent of proposed disclosure thereof. The Company and the Management
Stockholders understand and acknowledge that ENSERCH and its subsidiaries and
Affiliates are not making any representation or warranty, express or implied, as
to the accuracy or completeness of the Confidential Information, and ENSERCH and
its subsidiaries and Affiliates and any of their respective officers, directors,
employees, stockholders, owners, affiliates or agents shall not have any
liability to the Company, the Management Stockholders or any other person
resulting from the use of the Confidential Information. No failure or delay by
ENSERCH in exercising any right, power or privilege hereunder shall operate as a
waiver hereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any right, power or
privilege hereunder. Notwithstanding any other provisions governing the term of
this covenant, the Company's and the Management Stockholders' obligations under
this Section 5.16 shall last until (i) the Closing or (ii) two years from the
date of termination of this Agreement.
Section 5.17. Stock Records. The Company and the Management Stockholders
will use their best efforts to insure that the stock records of the Company and
the Subsidiaries are correct and complete.
ARTICLE VI.
ENSERCH's Covenants
ENSERCH agrees that between the date hereof and the Closing:
Section 6.01. Consummation of Agreement. ENSERCH shall use its best
efforts to cause the consummation of the transactions contemplated hereby in
accordance with their terms and conditions.
Section 6.02. HSR Act. ENSERCH shall use its best efforts to file as
soon as possible, and to effect early termination of all applicable waiting
periods, under the HSR Act, including without limitation complying promptly with
all requests thereunder for additional information.
Section 6.03. Confidentiality Agreement. All information made available to
ENSERCH pursuant to this Agreement shall be maintained confidential by ENSERCH
as provided in that certain letter agreement regarding confidentiality dated May
5, 1995, between ENSERCH, Carroll and the Company (the "Confidentiality Agree-
ment"), the terms of which are incorporated into this Agreement by reference
and made a part hereof. ENSERCH shall further take whatever steps may be
necessary to ensure that ENSERCH's employees, consultants and agents comply with
the provisions of this Section 6.03 and the provisions of the Confidentiality
Agreement. Notwithstanding any other provisions governing the term of this
covenant, ENSERCH's obligations under the this Section 6.03 shall last until (i)
the Closing or (ii) two years from the date of termination of this Agreement.
Section 6.04. Approvals of Third Parties. ENSERCH shall use its best
efforts to secure, as soon as practicable after the date hereof, all necessary
approvals and consents of third parties to the consummation of the transactions
contemplated hereby.
ARTICLE VII.
ENSERCH's Conditions Precedent
Except as may be waived in writing by ENSERCH, the obligations of ENSERCH
hereunder are subject to the fulfillment at or prior to the Closing Date of each
of the following conditions:
Section 7.01. Representations and Warranties. The representations and
warranties of the Company and the Stockholders contained herein shall have been
true and correct in all material respects when initially made and shall be true
and correct in all material respects as of the Closing Date; and ENSERCH shall
have received a certificate of the Company's President, and each of the
Stockholders, dated as of the Closing Date, to the foregoing effect.
Section 7.02. Covenants and Conditions. The Company and the Stockholders
shall have performed and complied in all material respects with all covenants
and conditions required by this Agreement to be performed and complied with by
the Company and the Stockholders prior to the Closing Date; and ENSERCH shall
have received a certificate of the Company's President, and each of the
Stockholders, dated as of the Closing Date, to the foregoing effect.
Section 7.03. Opinion. Counsel to the Company and the Stockholders shall
have delivered to ENSERCH its opinion, dated as of the Closing Date, in form and
substance reasonably satisfactory to counsel for ENSERCH.
Section 7.04. Proceedings. No action, proceeding or order by any court
or governmental body or agency shall have been threatened, orally or in writing,
asserted, instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.
Section 7.05. No Material Adverse Change. No material adverse change in
the condition (financial or otherwise), operations, assets, liabilities, busi-
ness or prospects (except those that affect the industry in general) of the
Company or any Subsidiary, taken as a whole, shall have occurred since the date
of the most recent audited balance sheet included in the Financial Statements,
whether or not such change was caused by the deliberate act or omission of the
Company or any Subsidiary or the Stockholders.
Section 7.06. HSR Act. All applicable waiting periods under the HSR Act
shall have expired or been terminated.
Section 7.07. Due Diligence Review. On or prior to July 9, 1995, ENSERCH
shall not have discovered Due Diligence Conditions (as defined in Article IX)
that in the aggregate exceed $1,000,000 in amount and delivered a Due Diligence
Completion Notice disclosing the nature and amount of such Due Diligence
Conditions in accordance with Article IX.
Section 7.08. Release of Stockholders' Claims; Stockholders' Loans.
ENSERCH shall have received duly executed documents in form satisfactory to
ENSERCH pursuant to which the Stockholders release, relinquish and waive any and
all claims, demands, causes of action, suits, judgments or controversies of any
kind whatsoever, whether known or unknown, that the Stockholder may have against
the Company and/or the Subsidiaries as of the Closing Date, for any reason
whatsoever, including without limitation claims by the Stockholders against the
Company and/or the Subsidiaries with respect to dividends, repayment of loans,
violation of preemptive rights or payment of salaries or other compensation.
All sums owing from the Stockholders to the Company shall either (i) be repaid
prior to the Closing or (ii) transferred in accordance with Section 7.11.
Section 7.09. Closing Deliveries. ENSERCH shall have received all
documents, duly executed in form satisfactory to ENSERCH and its counsel,
referred to in Section 10.01.
Section 7.10. Employment Agreements. The Key Employees shall have entered
into employment agreements with ENSERCH Energy Services, Inc. in the form
mutually agreed by ENSERCH and the Key Employees.
Section 7.11. Preferred Stock Redemption and Sale of Stockholder Notes.
All the outstanding Preferred Stock shall have been redeemed in accordance with
its terms (the "Redemption") for $4,000,000 plus a per diem payment of $1,333.33
for every day from June 15, 1995 through and including the date of the
Redemption. The Company may transfer notes owing to it from Carroll in partial
payment of this obligation. The value assigned to such notes transferred to the
holder of the Preferred Stock shall be the outstanding principal amount of the
notes plus any accrued but unpaid interest on the notes at the time of the
assignment.
Section 7.12. Disposition of Public Utilities. The Company and the
Subsidiaries shall have disposed of any interest they may have in any public
utility, including without limitation the utilities described in Exhibit 9.31.
Section 7.13. Pooling of Interests. Except for the Redemption, the Carroll
Transfer and the exercise of the Warrants by Savant, no Stockholder shall
have directly or indirectly sold, transferred, assigned or disposed of or in any
other way reduced his or its risk relative to the ENSERCH Shares to be received
in the business combination contemplated by this Agreement until such time as
ENSERCH issues the Earnings Release. No Stockholder shall have made changes in
its or his Stock equity interest in contemplation of the transactions
contemplated by this Agreement other than as a result of the exercise of the
Warrants by Savant, the Carroll Transfer or the Redemption.
Section 7.14. Exercise of Warrants. All the Warrants and any
corresponding rights to purchase shares triggered by the Redemption shall have
been fully exercised prior to the Closing.
Section 7.15. Termination of the Stockholders' Agreement. The
Stockholders' Agreement will have been terminated prior to the Closing.
ARTICLE VIII.
The Company's and the Stockholders' Conditions Precedent
Except as may be waived in writing by the Company and the Stockholders, the
obligations of the Company and the Stockholders hereunder are subject to
fulfillment at or prior to the Closing Date of each of the following conditions:
Section 8.01. Representations and Warranties. The representations and
warranties of ENSERCH contained herein shall be true and correct in all material
respects when initially made and shall be true and correct in all material
respects as of the Closing Date; and ENSERCH shall have delivered to the Company
and the Stockholders a certificate of ENSERCH's President or Vice President,
dated as of the Closing Date, to the foregoing effect.
Section 8.02. Covenants and Conditions. ENSERCH shall have performed and
complied in all material respects with all covenants and conditions required by
this Agreement to be performed and complied with by it prior to the Closing
Date; and ENSERCH shall have delivered to the Company and the Stockholders a
certificate of ENSERCH's President or Vice President, dated as of the Closing
Date, to the foregoing effect.
Section 8.03. Proceedings. No action, proceeding or order by any court
or governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.
Section 8.04. HSR Act. All applicable waiting periods under the HSR Act
shall have expired or been terminated.
Section 8.05. Closing Deliveries. The Company or the Stockholders, as
the case may be, shall have received all documents referred to in Section 10.02.
Section 8.06. Opinion. Counsel to ENSERCH shall have delivered to
Stockholders its opinion, dated as of the Closing Date, in form and substance
reasonably satisfactory to counsel to the Company and the Stockholders.
ARTICLE IX.
Due Diligence Conditions
ENSERCH's obligation to proceed to the consummation of this transaction is
conditioned upon its due diligence review, which shall be completed on or prior
to July 9, 1995, not revealing violations of the conditions set forth in this
Article IX and the representations and warranties set forth in Article III
(except Section 3.09) (such conditions in Article IX and representations and
warranties in Article III (except Section 3.09) are, collectively, the "Due
Diligence Conditions") that, in the aggregate, exceed $1,000,000 in amount.
Upon completion of its due diligence review on or prior to July 9, 1995, ENSERCH
shall send a written notice (the "Due Diligence Completion Notice") to the Com-
pany stating the amount and nature of the violations of the Due Diligence
Conditions discovered by ENSERCH. After the delivery of the Due Diligence
Completion Notice, or if such notice is not delivered and this Agreement is not
otherwise terminated, effective at the close of business on July 9, 1995,
ENSERCH cannot assert any violations of the Due Diligence Conditions not con-
tained in the Due Diligence Completion Notice in order to terminate its obliga-
tions to proceed to the Closing pursuant to this Article IX or Section 7.07.
Section 9.01. Subsidiaries. The Company does not own, directly or
indirectly, any of the capital stock of any other corporation or any equity,
profit sharing, participation or other interest in any corporation, partnership,
joint venture or other entity, except the Subsidiaries and other entities listed
on Exhibit 9.01. Each Subsidiary is duly organized and validly existing in good
standing under the laws of the state in which it is incorporated, and is duly
qualified to do business and in good standing in each jurisdiction wherein
failure to qualify to do business could adversely affect the Subsidiary. The
Company has delivered to ENSERCH true, complete and correct copies of the
Certificate of Incorporation and Bylaws of each Subsidiary, as in effect on the
date hereof. The authorized and issued capital stock of each Subsidiary is set
forth on Exhibit 9.01. The minute books of the Subsidiaries, copies of which
have been delivered to ENSERCH, contain accurate minutes of all meetings of, and
accurate consents to all actions taken without meetings by, the Board of
Directors (and any committees thereof) and the stockholders of each Subsidiary
since the formation of the Subsidiary. All of the issued and outstanding shares
of capital stock of each Subsidiary are duly authorized, validly issued, fully
paid and nonassessable and are owned by the Company free and clear of all
security interests, liens, adverse claims, encumbrances, equities, proxies,
options or stockholders' agreements. Except as set forth on Exhibit 9.01, there
are in existence no options, warrants or similar rights granted by any
Subsidiary, or any agreements to which any Subsidiary is a party, for the
issuance or sale by it of any securities except to the Company. Each Subsidiary
has obtained or duly applied for all material licenses, permits and certificates
from government agencies and authorities that are necessary to the conduct of
its business, and the consummation of the transactions contemplated hereby shall
not result in the loss or impairment of, or any default under, any such license,
permit or certificate.
Section 9.02. No Violation. Neither the execution, delivery or per-
formance of this Agreement or the other agreements contemplated hereby nor the
consummation of the transactions contemplated hereby or thereby shall (i)
conflict with, or result in a violation or breach of the terms, conditions or
provisions of, or constitute a default under, the Certificate of Incorporation
or Bylaws of the Company or any Subsidiary or any agreement, indenture or other
instrument under which the Company or any Subsidiary is bound or to which the
Stock or any of the assets of the Company or any Subsidiary are subject, or
result in the creation or imposition of any security interest, lien, charge or
encumbrance upon the Stock or any of the assets of the Company or any Subsid-
iary, or (ii) violate or conflict with any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or regulatory agency
or body having jurisdiction over the Company or any Subsidiary or the Stock
or the assets of the Company or any Subsidiary. The Company and each of the
Subsidiaries has complied with all laws, regulations and licensing requirements
and has filed with the proper authorities all necessary statements and reports.
Section 9.03. Consents. Except as set forth on Exhibit 9.03, no consent,
authorization, approval, permit or license of, or filing with, any governmental
or public body or authority, any lender or lessor or any other person or entity
is required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement or the agreements contemplated hereby
on the part of the Company or the Stockholders.
Section 9.04. Financial Statements. The Company has furnished to ENSERCH
the audited consolidated balance sheet and related audited consolidated
statements of income and retained earnings and cash flows of the Company as of
and for the year ended November 30, 1994, including the notes thereto, as well
as unaudited consolidated balance sheet and related unaudited consolidated
statements of income and retained earnings and cash flows of the Company as of
and for the four-month period ended March 31, 1995 (collectively, the "Financial
Statements"). The Financial Statements are true, correct and complete, are in
accordance with the books and records of the Company and the Subsidiaries,
fairly present the consolidated financial condition and results of operations of
the Company and the Subsidiaries as of the dates and for the periods indi-
cated and have been prepared in conformity with generally accepted accounting
principles applied on a basis consistent with prior periods.
Section 9.05. Liabilities and Obligations. Except as set forth on Exhibit
9.05, the Financial Statements reflect all liabilities of the Company and the
Subsidiaries, accrued, contingent or otherwise (known or unknown and asserted
or unasserted), arising out of transactions effected or events occurring on or
prior to the date hereof. All reserves shown in the Financial Statements are
appropriate, reasonable and sufficient to provide for losses thereby
contemplated. Except as set forth in the Financial Statements and on Exhibit
9.05, neither the Company nor any Subsidiary is liable upon or with respect to,
or obligated in any other way to provide funds in respect of or to guarantee or
assume in any manner, any debt, obligation or dividend of any person,
corporation, limited liability company, association, partnership, joint venture,
trust or other entity, and none of the Company, any Subsidiary or Stockholders
know of any basis for the assertion of any other claims or liabilities of any
nature or in any amount.
Section 9.06. Employee Matters.
(a) Cash Compensation. Exhibit 9.06(a) contains a complete and accurate
list of the names, titles and cash compensation, including without limitation
wages, salaries, bonuses (discretionary and formula) and other cash compensation
(the "Cash Compensation") of all employees of the Company and the Subsidiaries.
In addition, Exhibit 9.06(a) contains a complete and accurate description of (i)
all increases in Cash Compensation of employees of the Company and the
Subsidiaries during the current and immediately preceding fiscal year of the
Company and (ii) any promised increases in Cash Compensation of employees of the
Company and the Subsidiaries that have not yet been effected.
(b) Compensation Plans. Exhibit 9.06(b) contains a complete and accurate
list of all compensation plans, arrangements or practices (the "Compensation
Plans") sponsored by the Company or the Subsidiaries or to which the Company or
any Subsidiary contributes on behalf of its employees, other than Employee
Benefit Plans listed on Exhibit 9.07(a) or the Employment Agreements listed on
Exhibit 9.06(c). The Compensation Plans include without limitation plans,
arrangements or practices that provide for severance pay, deferred compensation,
incentive, bonus or performance awards, and stock ownership or stock options.
The Company has provided ENSERCH a copy of each written Compensation Plan and a
written description of each unwritten Compensation Plan. Each of the
Compensation Plans can be terminated or amended at will by the Company.
(c) Employment Agreements. Exhibit 9.06(c) contains a complete and accu-
rate list of all employment agreements (the "Employment Agreements") to which
the Company or any Subsidiary is a party with respect to its employees. The
Employment Agreements include without limitation employee leasing agreements,
employee services agreements and noncompetition agreements. The Company has
provided ENSERCH a copy of each written Employment Agreement and a written
description of each unwritten Employment Agreement.
(d) Employee Policies and Procedures. Exhibit 9.06(d) contains a complete
and accurate list of all employee manuals, policies, procedures and work-related
rules (the "Employee Policies and Procedures") that apply to employees of the
Company or any Subsidiary. The Company has provided ENSERCH a copy of all
written Employee Policies and Procedures and a written description of all
unwritten Employee Policies and Procedures. Each of the Employee Policies and
Procedures can be amended or terminated at will by the Company or the
appropriate Subsidiary, as the case may be.
(e) Unwritten Amendments. Except as set forth on Exhibit 9.06(e), no
unwritten amendments have been made, whether by oral communication, pattern of
conduct or otherwise, with respect to any Compensation Plans, Employment
Agreements or Employee Policies and Procedures.
(f) Labor Compliance. Except as set forth on Exhibit 9.06(f) or in the
Financial Statements, the Company and each Subsidiary
(i) has been and is in compliance with all laws, rules,
regulations and ordinances respecting employment and employment
practices, terms and conditions of employment and wages and hours,
and
(ii) is not liable for any arrears of wages or penalties for
failure to comply with any of the foregoing.
Neither the Company nor any Subsidiary has engaged in any unfair labor
practice or discriminated on the basis of race, color, religion, sex, national
origin, age or handicap in its employment conditions or practices.
There are no
(i) unfair labor practice charges or complaints or racial,
color, religious, sex, national origin, age or handicap
discrimination charges or complaints pending or threatened against
the Company or any Subsidiary before any federal, state or local
court, board, department, commission or agency nor does any basis
therefor exist or
(ii) existing or threatened labor strikes, disputes,
grievances, controversies or other labor troubles affecting the
Company or any Subsidiary, nor does any basis therefor exist.
(g) Unions. Neither the Company nor any Subsidiary has ever been a party
to any agreement with any union, labor organization or collective bargaining
unit. Except as set forth on Exhibit 9.06(g), no employees of the Company or
any Subsidiary are represented by any union, labor organization or collective
bargaining unit. To the best knowledge of the Company, the employees of the
Company and the Subsidiaries have no intention to and have not threatened to
organize or join a union, labor organization or collective bargaining unit.
(h) Aliens. All employees of the Company and the Subsidiaries are
citizens of, or are authorized to be employed in, the United States.
Section 9.07. Employee Benefit Plans.
(a) Identification. Exhibit 9.07(a) contains a complete and accurate list
of all employee benefit plans (the "Employee Benefit Plans") (within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) sponsored by the Company or any Subsidiary or to which the
Company or any Subsidiary contributes on behalf of its employees and all
Employee Benefit Plans previously sponsored or contributed to on behalf of its
employees within the three years preceding the date hereof. The Company has
provided ENSERCH with copies of all plan documents, determination letters,
pending determination letter applications, trust instruments, insurance con-
tracts, administrative services contracts, annual reports, actuarial valuations,
summary plan descriptions, summaries of material modifications, administrative
forms and other documents that constitute a part of or are incident to the
administration of the Employee Benefit Plans. In addition, the Company has
provided ENSERCH a written description of all existing practices engaged in by
the Company or any Subsidiary that constitute Employee Benefit Plans. Each of
the Employee Benefit Plans can be terminated or amended at will by the Company
or the appropriate Subsidiary, as the case may be. No unwritten amendment
exists with respect to any Employee Benefit Plan.
(b) Administration. Each Employee Benefit Plan has been administered and
maintained in compliance with all laws, rules and regulations.
(c) Examinations. No Employee Benefit Plan is currently the subject of an
audit, investigation, enforcement action or other similar proceeding conducted
by any state or federal agency.
(d) Prohibited Transactions. No prohibited transactions (within the
meaning of Section 4975 of the Code) have occurred with respect to any Employee
Benefit Plan.
(e) Claims and Litigation. No threatened or pending claims, suits or
other proceedings exist with respect to any Employee Benefit Plan other than
normal benefit claims filed by participants or beneficiaries.
(f) Qualification. Except as set forth on Exhibit 9.07(a), the Company has
received a favorable determination letter or ruling from the Internal Revenue
Service for each Employee Benefit Plan intended to be qualified within the
meaning of Section 401(a) of the Code and/or tax-exempt within the meaning of
Section 501(a) of the Code. No proceedings exist or have been threatened that
could result in the revocation of any such favorable determination letter or
ruling.
(g) Funding Status. No accumulated funding deficiency (within the meaning
of Section 412 of the Code), whether waived or unwaived, exists with respect to
any Employee Benefit Plan or any plan sponsored by any member of a controlled
group (within the meaning of Section 412(n)(6)(B) of the Code) in which the
Company or any Subsidiary is a member (a "Controlled Group"). With respect to
each Employee Benefit Plan subject to Title IV of ERISA, the assets of each such
plan are at least equal in value to the present value of accrued benefits
determined on an ongoing basis as of the date hereof. With respect to each
Employee Benefit Plan described in Section 501(c)(9) of the Code, the assets of
each such plan are at least equal in value to the present value of accrued bene-
fits as of the date hereof. Exhibit 9.07(g) contains a complete and accurate
statement of all actuarial assumptions applied to determine the present value of
accrued benefits under all Employee Benefit Plans subject to actuarial
assumptions.
(h) Excise Taxes. Except as set forth in the Financial Statements,
neither the Company nor any Subsidiary or any member of a Controlled Group has
any liability to pay excise taxes with respect to any Employee Benefit Plan
under applicable provisions of the Code or ERISA.
(i) Multiemployer Plans. Neither the Company nor any Subsidiary nor any
member of a Controlled Group is or ever has been obligated to contribute to a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(j) PBGC. No facts or circumstances exist that would result in the
imposition of liability against ENSERCH by the Pension Benefit Guaranty Company
as a result of any act or omission by the Company, any Subsidiary or any member
of a Controlled Group. No reportable event (within the meaning of Section 4043
of ERISA) for which the notice requirement has not been waived has occurred with
respect to any Employee Benefit Plan subject to the requirements of Title IV of
ERISA.
(k) Medical and Dental Care Claims. Exhibit 9.07(k) contains a complete
and accurate list of all claims made (without identifying specific individuals)
under any medical or dental care plan or commitment offered by the Company or
any Subsidiary to its employees involving hospitalization, medical or dental
care claims that have exceeded $25,000 per year for an individual during the
Company's or the appropriate Subsidiary's current fiscal year or any of the
three fiscal years preceding the date hereof.
(l) Retirees. Neither the Company nor any Subsidiary has any obligation
or commitment to provide medical, dental or life insurance benefits to or on
behalf of any of its employees who may retire or any of its former employees who
have retired from employment with the Company or any Subsidiary.
Section 9.08. Absence of Certain Changes. Except as set forth on Exhibit
9.08 or disclosed in the Financial Statements, since November 30, 1994, neither
the Company nor any Subsidiary has
(a) suffered any material adverse change, whether or not caused by any
deliberate act or omission of the Company, any Subsidiary or any Stockholder, in
its condition (financial or otherwise), operations, assets, liabilities,
business or prospects;
(b) contracted for the purchase of any capital assets having a cost in
excess of $25,000 or paid any capital expenditures in excess of $25,000.
(c) incurred any indebtedness for borrowed money or issued or sold any
debt securities;
(d) incurred or discharged any liabilities or obligations except in the
ordinary course of business;
(e) paid any amount on any indebtedness prior to the due date, forgiven
or cancelled any debts or claims or released or waived any rights or claims;
(f) mortgaged, pledged or subjected to any security interest, lien,
lease or other charge or encumbrance any of its properties or assets;
(g) suffered any damage or destruction to or loss of any assets (whether
or not covered by insurance) that has materially and adversely affected, or
could materially and adversely affect, its business;
(h) acquired or disposed of any assets except in the ordinary course of
business;
(i) written up or written down the carrying value of any of its assets;
(j) changed the costing system or depreciation methods of accounting for
its assets;
(k) waived any material rights or forgiven any material claims;
(l) lost or terminated any employee, customer or supplier, the loss or
termination of which has materially and adversely affected, or could materially
and adversely affect, its business or assets;
(m) increased the compensation of any director or officer;
(n) increased the compensation of any employee except in the ordinary
course of business;
(o) made any payments to or loaned any money to any person or entity
referred to in Section 9.28;
(p) formed or acquired or disposed of any interest in any corporation,
partnership, joint venture or other entity;
(q) redeemed, purchased or otherwise acquired, or sold, granted or
otherwise disposed of, directly or indirectly, any of its capital stock or
securities or any rights to acquire such capital stock or securities, or agreed
to change the terms and conditions of any such rights;
(r) entered into any agreement with any person or group, or modified or
amended in any material respect the terms of any existing agreement except in
the ordinary course of business;
(s) entered into, adopted or amended any Employee Benefit Plan; or
(t) entered into any other commitment or transaction or experienced any
other event that is material to this Agreement or to any of the other agreements
and documents executed or to be executed pursuant to this Agreement or to the
transactions contemplated hereby or thereby, or that has materially and
adversely affected, or could materially and adversely affect, the condition
(financial or otherwise), operations, assets, liabilities, business or prospects
of the Company or the appropriate Subsidiary.
Section 9.09. Title; Leased Assets.
(a) Real Property. A description of all interests in real property owned
by the Company and the Subsidiaries (collectively, the "Real Property") is set
forth on Exhibit 9.09(a). Except as set forth on Exhibit 9.09(a), the Company
and the Subsidiaries have good, valid and indefeasible title to all the Real
Property. The Real Property and the leased real property referred to in Section
9.09(c) constitute the only real property necessary for or used in the conduct
of the business of the Company and the Subsidiaries.
(b) Personal Property. Except as set forth on Exhibit 9.09(b), the
Company and the Subsidiaries have good, valid and indefeasible title to all
tangible and intangible personal property owned by them (collectively, the
"Personal Property"). The Personal Property and the leased personal property
referred to in Section 9.09(c) constitute the only personal property necessary
for or used in the conduct of the business of the Company and the Subsidiaries.
(c) Leases. A list and brief description of all leases of real and
personal property to which the Company or any Subsidiary is a party, either as
lessor or lessee, are set forth on Exhibit 9.09(c). All such leases are valid
and enforceable in accordance with their respective terms except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
(d) Right to Use Assets. Except for those assets acquired since March 31,
1995, which are listed on Exhibit 9.09(d), all tangible and intangible assets
necessary for or used in the conduct of the business of the Company and the
Subsidiaries are reflected in the Financial Statements in a manner that is in
conformity with generally accepted accounting principles applied on a basis
consistent with prior periods. Either the Company or a Subsidiary owns, leases
or otherwise possesses a right to use all assets necessary for or used in the
conduct of the business of the Company or such Subsidiary, which shall not be
impaired by the consummation of the transactions contemplated hereby.
Section 9.10. Commitments.
(a) Commitments; Defaults. Except as set forth on Exhibit 9.10 or in the
Financial Statements, neither the Company nor any Subsidiary has entered into,
nor are the Stock, the assets or the business of the Company or any Subsidiary
bound by, whether or not in writing, any
(i) partnership or joint venture agreement;
(ii) deed of trust or other security agreement;
(iii) guaranty or suretyship, indemnification or contribution
agreement or performance bond;
(iv) employment, consulting or compensation agreement or
arrangement, including the election or retention in office of any
director or officer;
(v) labor or collective bargaining agreement;
(vi) debt instrument, loan agreement or other obligation
relating to indebtedness for borrowed money or money lent or to be
lent to another;
(vii) deed or other document evidencing an interest in or
contract to purchase or sell real property;
(viii) agreement with dealers or sales or commission agents,
public relations or advertising agencies, accountants or attorneys;
(ix) lease of real or personal property, whether as lessor,
lessee, sublessor or sublessee (except as listed on Exhibit
9.09(c));
(x) agreement between the Company and any affiliate of the
Company;
(xi) agreement relating to any material matter or transaction
in which an interest is held by a person or entity that is an
affiliate of the Company;
(xii) agreement relating to any material matter or
transaction in which an interest is held by any person or entity
referred to in Section 9.28;
(xiii) powers of attorney;
(xiv) contracts containing noncompetition covenants;
(xv) any other contract or arrangement that involves an
unperformed commitment in excess of $25,000 or that cannot be
terminated on 30 days notice or less;
(xvi) any agreement for the acquisition of services,
supplies, equipment or other personal property and involving more
than $25,000 in the aggregate;
(xvii) agreement providing for the purchase from a supplier
of all or substantially all of the requirements of the Company or
any Subsidiary of a particular product or service; or
(xviii) any other agreement or commitment not made in the
ordinary course of business or that is material to the business or
financial condition of the Company or any Subsidiary and not
otherwise disclosed in this Agreement.
All of the items listed on Exhibit 9.10 are hereinafter collectively referred to
as the "Commitments." True, correct and complete copies of the written
Commitments, and true, correct and complete written descriptions of the oral
Commitments, have heretofore been delivered or made available to ENSERCH. There
are no existing defaults, events of default or events, occurrences, acts or
omissions that, with the giving of notice or lapse of time or both, would
constitute defaults by the Company or any Subsidiary, and no penalties have been
incurred nor are amendments pending, with respect to the Commitments, except as
described on Exhibit 9.10. The Commitments are in full force and effect and are
valid and enforceable obligations of the parties thereto in accordance with
their respective terms, and no defenses, off-sets or counterclaims have been
asserted or, to the best knowledge of the Company and Stockholders, may be made
by any party thereto, nor has the Company or any Subsidiary waived any rights
thereunder, except as described on Exhibit 9.10. Neither the Company nor any
Subsidiary has received notice of any default with respect to any Commitment.
(b) No Cancellation or Termination of Commitment. Except as contemplated
hereby, neither the Company nor any Subsidiary nor any Stockholder has received
notice of any plan or intention of any other party to any Commitment to exercise
any right to cancel or terminate any Commitment or agreement, and neither the
Company nor any Subsidiary nor any Stockholder knows of any fact that would
justify the exercise of such a right. Neither the Company nor any Subsidiary
nor any Stockholder currently contemplates, or has reason to believe any other
person or entity currently contemplates, any amendment or change to any Com-
mitment. Except as listed on Exhibit 9.10, none of the customers or suppliers of
the Company or any Subsidiary has refused, or communicated that it shall or may
refuse, to purchase or supply goods or services, as the case may be, or has
communicated that it shall or may substantially reduce the amounts of goods or
services that it is willing to purchase from, or sell to, the Company or any
Subsidiary.
Section 9.11. Adverse Agreements. Neither the Company nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree or
presently existing rule or regulation that materially and adversely affects, or
so far as the Company or any Stockholder can now foresee, may in the future
materially and adversely affect, the condition (financial or otherwise),
operations, assets, liabilities, business or prospects of the Company or any
Subsidiary.
Section 9.12. Insurance. The Company and the Subsidiaries carry property,
liability, workers' compensation and such other types of insurance as is
customary in the industry of the insured. A list of all insurance policies of
the Company and the Subsidiaries are set forth on Exhibit 9.12. All of such
policies are valid and enforceable policies, issued by insurers of recognized
responsibility in amounts and against such risks and losses as is customary in
the industry of the insured. Such insurance shall be outstanding and duly in
force without interruption up to and including the Closing Date. True, complete
and correct copies of all such policies have been provided to ENSERCH on or
prior to the date hereof.
Section 9.13. Patents, Trademarks, Service Marks and Copyrights.
(a) Ownership. The Company and each Subsidiary owns all patents,
trademarks, service marks and copyrights, if any, necessary to conduct its
business, or possesses adequate licenses or other rights, if any, therefor,
without conflict with the rights of others. Set forth on Exhibit 9.13 is a true
and correct description of the following (the "Proprietary Rights"):
(i) all trademarks, tradenames, service marks and other trade
designations, including common law rights, registrations and
applications therefor, and all patents, copyrights and applications
currently owned, in whole or in part, by the Company or any
Subsidiary with respect to the business of the Company and the
Subsidiaries, and all licenses, royalties, assignments and other
similar agreements relating to the foregoing to which the Company or
any Subsidiary is a party (including expiration date if applicable);
and
(ii) all agreements relating to technology, know-how or
processes that the Company or any Subsidiary is licensed or
authorized to use by others, or which it licenses or authorizes
others to use.
(b) Conflicting Rights of Third Parties. The Company or a Subsidiary has
the sole and exclusive right to use the Proprietary Rights without infringing or
violating the rights of any third parties. Use of the Proprietary Rights does
not require the consent of any other person and the Proprietary Rights are
freely transferable. No claim has been asserted by any person to the ownership
of or right to use any Proprietary Right or challenging or questioning the
validity or effectiveness of any license or agreement constituting a part of any
Proprietary Right, and neither the Company nor any Stockholder knows of any
valid basis for any such claim. Each of the Proprietary Rights is valid and
subsisting, has not been cancelled, abandoned or otherwise terminated and, if
applicable, has been duly issued or filed.
(c) Claims of Other Persons. The Company and Stockholders have no
knowledge of any claim that, or inquiry as to whether, any product, activity or
operation of the Company or any Subsidiary infringes upon or involves, or has
resulted in the infringement of, any proprietary right of any other person, cor-
poration or other entity; and no proceedings have been instituted, are pending
or are threatened that challenge the rights of the Company or any Subsidiary
with respect thereto.
Section 9.14. Trade Secrets and Customer Lists. Either the Company or the
appropriate Subsidiary has the right to use, free and clear of any claims or
rights of others except claims or rights specifically set forth on Exhibit 9.14,
all trade secrets, customer lists and proprietary information required for the
marketing of all products and services formerly or presently sold or marketed by
the Company or such Subsidiary. Except as set forth on Exhibit 9.14, neither
the Company nor any Subsidiary is using or in any way making use of any con-
fidential information or trade secrets of any third party, including without
limitation any past or present employee of the Company or any Subsidiary.
Section 9.15. Taxes. Violations of the conditions set forth in this
Section 9.15 shall not be considered violations of Due Diligence Conditions
except to the extent they exceed $1,250,000 in amount in the aggregate.
(a) Filing of Tax Returns. The Company and each Subsidiary have
duly and timely filed or shall duly and timely file (in accordance with
any extensions duly granted by the appropriate governmental agency, if
applicable) with the appropriate governmental agencies all returns
(including information returns) and reports, including all schedules or
attachments thereto, required by the United States or any state or any
political subdivision thereof or any foreign jurisdiction to be filed on
or before the Closing Date by the Company and each Subsidiary in
connection with any tax ("Tax Returns"). All such Tax Returns are, or
shall be, complete and accurate and properly reflect the taxes of the
Company and each Subsidiary for the periods covered hereby.
(b) Payment of Taxes. The Company and each Subsidiary have paid
or accrued all taxes that have become due with respect to any Tax Returns
that they have filed or have been required to file for its business
activities through the Closing Date.
(c) No Pending Deficiencies, Delinquencies, Assessments or Audits.
Except as set forth on Exhibit 9.15(c), no tax deficiency or delinquency
has been asserted against the Company or any Subsidiary; there is no
unpaid assessment, proposal for additional taxes, deficiency or
delinquency in the payment of any of the taxes of the Company or any
Subsidiary that, to the knowledge of the Company, any Subsidiary or the
Stockholders, could be asserted by any tax authority; there is no tax
authority audit of the Company or any Subsidiary pending and the results
of any completed audits are properly reflected in the Financial
Statements; and there are no pending claims for refund of taxes filed by
the Company or any Subsidiary.
(d) Tax Liens. There are no liens for taxes upon any assets of
the Company or any Subsidiary other than statutory liens for taxes not yet
delinquent.
(e) All Withholding Requirements Satisfied. All monies required
to be withheld by the Company and each Subsidiary and paid to governmental
agencies for all taxes (including any amounts required to be withheld
pursuant to Sections 1441 through 1446 of the Code) have been (i)
collected or withheld and either paid to the respective governmental
agencies or set aside in accounts for such purpose or (ii) properly
reflected in the Financial Statements.
(f) Request for Rulings. There are no outstanding requests for
rulings with any tax or revenue authority that would have a material
adverse effect on the operations of the Company and its Subsidiaries.
(g) Partnerships. Except as set forth on Exhibit 9.15(g), neither
the Company nor any Subsidiary owns any interest in any entity that is
characterized as a partnership under the Code.
Section 9.16. Compliance with Laws. The Company and each of the
Subsidiaries has complied with all laws, regulations and licensing requirements
and has filed with the proper authorities all necessary statements and reports.
There are no existing violations by the Company, any Subsidiaries or the
Stockholders of any federal, state or local law or regulation that could affect
the property or business of the Company and the Subsidiaries. The Company and
each of the Subsidiaries possesses all necessary licenses, franchises, permits
and governmental authorizations to conduct its business as now conducted, all of
which are listed on Exhibit 9.16.
Section 9.17. Finder's Fee. Neither the Company, any Subsidiary nor any
Stockholder has incurred any obligation for any finder's, broker's or agent's
fee in connection with the transactions contemplated hereby.
Section 9.18. Litigation. Except as described on Exhibit 9.18, there are
no legal actions or administrative proceedings or investigations instituted, or,
to the best knowledge of the Company, the Subsidiaries or the Stockholders,
threatened, against or affecting, or that could affect, the Company, any
Subsidiary, any of the Stock, or the business of the Company or any Subsidiary.
Neither the Company, any Subsidiary nor the Stockholders are (i) subject to any
continuing court or administrative order, writ, injunction or decree applicable
specifically to the Company or any Subsidiary or to their respective business,
assets, operations or employees or (ii) in default with respect to any such
order, writ, injunction or decree. Neither the Company, any Subsidiary nor the
Stockholders know of any basis for any such action, proceeding or investigation.
Section 9.19. Accuracy of Information Furnished. All information
furnished to ENSERCH by the Company, any Subsidiary or any Stockholder hereby or
in connection with the transactions contemplated hereby is true, correct and
complete in all respects. Such information states all facts required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements are made, true, correct and complete.
Section 9.20. Condition of Fixed Assets. All of the plants, structures
and equipment (the "Fixed Assets") owned by the Company and the Subsidiaries are
in good condition and repair for their intended use in the ordinary course of
business and conform in all material respects with all applicable ordinances,
regulations and other laws and there are no known latent defects therein.
Section 9.21. Inventory. All of the inventory owned by the Company and
the Subsidiaries is in good, current, standard and merchantable condition.
Purchase commitments are not in excess of normal requirements and, taken as a
whole, are not at prices in excess of market prices. The Company and the
Subsidiaries have the types and quantities of inventories appropriate, taken as
a whole, to conduct their respective businesses consistently with past
practices.
Section 9.22. Books of Account. The books of account of the Company and
the Subsidiaries have been kept accurately in the ordinary course of business,
the transactions entered therein represent bona fide transactions and the
revenues, expenses, assets and liabilities of the Company and the Subsidiaries
have been properly recorded in such books.
Section 9.23. Accounts Receivable. Exhibit 9.23 sets forth the accounts
receivable of the Company and the Subsidiaries from sales made as of May 30,
1995, and the payments and rights to receive payments related thereto. All such
accounts receivable have arisen from bona fide transactions in the ordinary
course of business and are valid and enforceable claims subject to no right of
set-off or counterclaim.
Section 9.24. Distributions and Repurchases. Except as set forth on
Exhibit 9.24 and except for the redemption of Preferred Stock contemplated by
Section 7.13, no distribution, payment or dividend of any kind has been declared
or paid by the Company or any Subsidiary on any of its capital stock at any
time. Except as set forth on Exhibit 9.24, no repurchase of any of the capital
stock of the Company or any Subsidiary has been approved or effected by the
Company or any Subsidiary at any time.
Section 9.25. Customers. Set forth on Exhibit 9.25 is a complete and
accurate list of the ten largest customers of the Company and each Subsidiary,
taken as a whole, in terms of sales for each of the last three fiscal years and
the current fiscal year to date, showing, with respect to each, the name,
address and pricing and sales records relating to such customer.
Section 9.26. Suppliers. Set forth on Exhibit 9.26 is a complete and
accurate list of the ten largest suppliers of the Company and the Subsidiaries,
taken as a whole, in terms of dollar volume of transactions for each of the last
three fiscal years and the current fiscal year to date, showing, with respect to
each, the name, address and aggregate dollar volume of purchases from such
supplier.
Section 9.27. Banking Relations. Set forth on Exhibit 9.27 is a complete
and accurate list of all arrangements that the Company and the Subsidiaries have
with any bank or other financial institution, indicating with respect to each
relationship the type of arrangement maintained (such as checking account,
borrowing arrangements, safe deposit box, etc.) and the person or persons
authorized in respect thereof.
Section 9.28. Ownership Interests of Interested Persons. Except as set
forth on Exhibit 9.28, no officer, supervisory employee, director or stockholder
of the Company or any Subsidiary, or their respective spouses or children, owns
directly or indirectly, on an individual or joint basis, any material interest
in, or serves as an officer or director of, any customer or supplier of the
Company or any Subsidiary, or any organization that has a material contract or
arrangement with the Company or any Subsidiary.
Section 9.29. Investments in Competitors. No Stockholder owns directly
or indirectly any interests or has any investment in any corporation, business
or other person that is a competitor of the Company or any Subsidiary.
Section 9.30. Environmental Matters.
(a) Environmental Laws. Neither the Company nor any Subsidiary nor any
of their respective assets is currently in violation of, or subject to any
existing, pending or threatened investigation or inquiry by any governmental
authority or to any remedial obligations under, any laws or regulations
pertaining to health or the environment (hereinafter sometimes collectively
called "Environmental Laws"), including without limitation (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Sec.
9601 et seq.), as amended from time to time ("CERCLA") (including without limi-
tation as amended pursuant to the Superfund Amendments and Reauthorization Act
of 1986), and regulations promulgated under CERCLA, (ii) the Resource Conserva-
tion and Recovery Act of 1976 (42 U.S.C. Sec.6901 et seq.), as amended from
time to time ("RCRA"), and regulations promulgated thereunder, and
(iii) statutes, rules or regulations, whether federal, state or local, relating
to asbestos or polychlorinated biphenyls, and this representation and warranty
would continue to be true and correct following disclosure to the applicable
governmental authorities of all relevant facts, conditions and circumstances, if
any, pertaining to the assets and operations of the Company and the
Subsidiaries.
(b) Use of Assets. To the best knowledge of the Company and Stock-
holders, the assets of the Company and the Subsidiaries have never been used
in a manner that would be in violation of any of the Environmental Laws,
including without limitation CERCLA and RCRA.
(c) Permits. Neither the Company nor any Subsidiary has obtained or is
required to obtain, and neither the Company nor any Subsidiary has any knowledge
of any reason ENSERCH shall be required to obtain, any permits, licenses or
similar authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures and equipment owned or leased by the Company or any
Subsidiary by reason of any Environmental Laws.
(d) Superfund List. To the best knowledge of the Company, the
Subsidiaries and the Stockholders, none of the assets owned or leased by the
Company or any Subsidiary are on any federal or state "Superfund" list or
subject to any environmentally related liens.
Section 9.31. Public Utility Holding Company. Except as set forth on
Exhibit 9.31, neither the Company nor any Subsidiary is a "public-utility
company" or a "holding company" as defined by the Public Utility Holding Company
Act of 1935, as amended.
ARTICLE X.
Closing Deliveries
Section 10.01. Deliveries of the Company and the Stockholders. At the
Closing, the Company and the Stockholders shall deliver to ENSERCH the fol-
lowing, all of which shall be in form and content satisfactory to ENSERCH and
its counsel:
(a) certificates representing all of the Stock, duly endorsed and in
proper form for transfer to ENSERCH by delivery under applicable law, or
accompanied by duly executed instruments of transfer in blank;
(b) a copy of resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of this Agreement and all
related documents and agreements, certified by the Secretary of the Company as
being a true and correct copy of the original thereof subject to no modifica-
tions or amendments;
(c) a certificate of the President of the Company, and of each of the
Stockholders, dated the Closing Date, as to the truth and correctness of the
representations and warranties of the Company and the Stockholders,
respectively, contained herein on and as of the Closing Date;
(d) a certificate of the President of the Company, and of each of the
Stockholders, dated the Closing Date, (i) as to the performance of and com-
pliance by the Company and the Stockholders, respectively, with all covenants
contained herein on and as of the Closing Date and (ii) certifying as to each
that all conditions precedent of the Company and the Stockholders to the Closing
have been satisfied;
(e) a certificate of the Secretary of the Company certifying as to the
incumbency of the directors and officers of the Company and as to the signatures
of such directors and officers who have executed documents delivered at the
Closing on behalf of the Company;
(f) a certificate, dated within five business days of the Closing Date,
of the Secretary of State of the appropriate jurisdiction establishing that the
Company and each Subsidiary is in existence, has paid all taxes due and owing
such state and otherwise is in good standing to transact business in its state
of incorporation;
(g) certificates, dated within five business days of the Closing Date,
of the Secretaries of State of the states in which the Company or any Subsidiary
is qualified to do business, to the effect that the Company and each Subsidiary,
as the case may be, is qualified to do business and is in good standing as a
foreign corporation in each of such states;
(h) an opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to
the Company and the Stockholders, dated as of the Closing Date, pursuant to
Section 7.03;
(i) all authorizations, consents, approvals, permits and licenses of, or
filings with, any governmental or public body or authority, any lender or lessor
or any other person or entity that is required to authorize, or whose
authorization is required in connection with, the execution, delivery and
performance of this Agreement or the agreements contemplated hereby on the part
of the Company or the Stockholders, including those authorizations, consents,
approvals, permits and licenses referenced on Exhibit 9.03;
(j) letters from each of Gibbs, Gates and each of the Trusts to ENSERCH,
in form reasonably acceptable to Gibbs, Gates, each of the Trusts and ENSERCH,
acknowledging to ENSERCH that certain conditions that must be met in order to
qualify for a limited offering exemption under Rule 506 promulgated under the
Securities Act have been met;
(k) an executed Employment Agreement between ENSERCH Energy Services,
Inc. and each Key Employee as required by Section 7.10;
(l) resignations of all the directors and officers of the Company and the
Subsidiaries;
(m) termination of any powers of attorney given by the Company or any
Subsidiary;
(n) a release of claims of the Stockholders as required by Section 7.08;
(o) a termination of the Stockholders' Agreement;
(p) evidence of the disposition of the public utilities called for in
Section 7.12;
(q) evidence of the full exercise of the Warrants and any rights of the
Stockholders contained therein;
(r) evidence of the Redemption;
(s) evidence of the repayment or transfer of the Stockholders' loans
called for in Section 7.08;
(t) evidence that the Company owns 100% of each of DGS/IESCO Inc. and
Industrial Energy Services Company; and
(u) such other instrument or instruments of transfer as shall be
necessary or appropriate, as ENSERCH or its counsel shall reasonably request, to
vest in ENSERCH title to the Stock free and clear of all security interests,
liens, adverse claims, encumbrances, equities, proxies, options or stockholders'
agreements.
Section 10.02. Deliveries of ENSERCH. At the Closing, ENSERCH shall
deliver the following to the Stockholders or the appropriate party:
(a) Certificates representing the ENSERCH Shares;
(b) a copy of the resolutions of the Board of Directors of ENSERCH
authorizing the execution, delivery and performance of this Agreement and all
related documents and agreements, certified by ENSERCH's Secretary as being a
true and correct copy of the original thereof subject to no modifications or
amendments;
(c) a certificate of the President or a Vice President of ENSERCH, dated
the Closing Date, as to the truth and correctness of the representations and
warranties of ENSERCH contained herein on and as of the Closing Date;
(d) a certificate of the President or a Vice President of ENSERCH, dated
the Closing Date, (i) as to the performance of and compliance by ENSERCH with
all covenants contained herein on and as of the Closing Date and (ii) certifying
that all conditions precedent of ENSERCH to the Closing have been satisfied;
(e) a certificate of the Secretary of ENSERCH certifying as to the
incumbency of the directors and officers of ENSERCH and as to the signatures of
such directors and officers who have executed documents delivered at the Closing
on behalf of ENSERCH;
(f) a certificate, dated within five business days of the Closing Date,
of the Secretary of State of Texas, establishing that ENSERCH is in existence,
has paid all taxes due and owing such state and otherwise is in good standing to
transact business in such state;
(g) an opinion of Jackson & Walker, L.L.P., counsel to ENSERCH, dated as
of the Closing Date pursuant to Section 8.06;
(h) an executed Registration Rights Agreement relating to the resale of
the ENSERCH Shares in the form attached as Exhibit 10.02(h) (the "Registration
Rights Agreement"); and
(i) an executed Employment Agreement between ENSERCH Energy Services,
Inc. and each Key Employee.
ARTICLE XI.
Post Closing Matters
Section 11.01. Further Instruments of Transfer. Following the Closing, at
the request of ENSERCH, the Stockholders shall deliver any further instruments
of transfer and take all such reasonable actions as may be necessary or
appropriate to (i) vest in ENSERCH title to the Stock free and clear of all
security interests, liens, adverse claims, encumbrances, equities, proxies,
options or stockholders' agreements and (ii) carry out more effectively the
provisions of this Agreement and to establish and protect the rights created in
favor of the parties hereunder or thereunder.
Section 11.02. Sale of ENSERCH Shares. The Stockholders agree that they
shall not sell, convey or otherwise transfer any of the ENSERCH Shares acquired
pursuant to this Agreement unless such transfer has been registered under the
Securities Act and any applicable state securities laws or an exemption from
such registration is available.
Section 11.03. Pooling of Interests. No Stockholder shall directly or
indirectly sell, transfer, assign or dispose of or in any other way reduce his
or its risk relative to any ENSERCH Shares received in the business combination
contemplated by this Agreement until ENSERCH issues the Earnings Release.
Section 11.04. Financial Results Press Release. ENSERCH shall issue as
promptly as practicable the Earnings Release stating the combined operating
results of ENSERCH and the Company covering the full calendar month during which
the actual Closing occurs. In any event, ENSERCH shall issue the Earnings
Release no later than 31 days after the end of the full calendar month during
which the actual Closing occurs.
Section 11.05. Operations of the Company. It is ENSERCH's present intent,
following the Closing, to continue the historic business of the Company or use
a significant portion of the Company's assets in a business.
Section 11.06. Registration of the ENSERCH Shares. ENSERCH will register
the ENSERCH Shares in accordance with the Registration Rights Agreement.
Section 11.07. Restrictive Legends. A restrictive legend in the form
attached hereto as Exhibit 11.07 will be placed on each certificate representing
the ENSERCH Shares delivered to a Stockholder and a notation shall be made in
the appropriate records of ENSERCH indicating that such shares are subject to
restrictions on transfer. ENSERCH shall cause the portion of the legend dealing
with (i) the restrictions based on this Agreement to be removed on the day the
Earnings Release is made and (ii) the restrictions based on securities laws to
be removed when the relevant shares are sold under either a registration
statement or an exemption from the securities laws.
ARTICLE XII.
Remedies
Section 12.01. Indemnification by the Stockholders and the
Company. Subject to the terms and conditions of this Article, each Stockholder
severally agrees to indemnify, defend and hold ENSERCH and its directors,
officers, agents, attorneys and Affiliates harmless from and against all losses,
claims, obligations, demands, assessments, penalties, liabilities, costs,
damages, attorneys' fees and expenses (collectively, "Damages"), asserted
against or incurred by such indemnitees by reason of or resulting from a breach
of any representation, warranty or covenant of the Stockholders contained
herein, in any exhibit, schedule, certificate or financial statement delivered
hereunder, or in any agreement executed by the Stockholders in connection with
the transactions contemplated hereby. The Stockholders shall only be required
to provide indemnification with regard to claims based on Section 3.09 and
Section 3.10 to the extent the aggregate amount of claims under Section 3.09 and
Section 3.10 exceed $100,000. The maximum amount of indemnification that the
Stockholders shall be required to provide with regard to Section 3.09 is
$1,000,000. The maximum amount of indemnification that the Stockholders shall
be required to provide with regard to Section 3.10 is $1,250,000. If any event
results in the breach of a representation, warranty or covenant of one or more,
but not all, of the Stockholders, the Stockholders who have breached the
representation, warranty or covenant shall be liable for the entire amount of
ENSERCH's Damages, but each breaching Stockholder's liability shall be in
proportion to that breaching Stockholder's ownership of Common Stock, as set
forth on Exhibit 3.01(b), compared to the ownership of Common Stock, as set
forth on Exhibit 3.01(b), of all the Stockholders who breached the
representation, warranty or covenant. If any event results in the breach
of a representation, warranty or covenant of all the Stockholders, the
Stockholders shall be liable for the entire amount of ENSERCH's Damages
in proportion to their ownership of the Stock as set forth on Exhibit
3.01(b). The representations and warranties contained in Sections 3.01,
3.05(b), 3.06, 3.07, 3.08, 3.12 and 3.13 are individual representations and
warranties of the Stockholders, and any damages resulting from the breach of any
such representation or warranty shall be born solely by the Stockholder
committing the breach. For the purposes of this Agreement, Carroll, Carroll
Group and each of the Trusts shall be jointly and severally responsible for any
breach of the representations, warranties and covenants by any other member of
that group. Subject to the terms and conditions of this Article, the Company
agrees to indemnify, defend and hold ENSERCH and its directors, officers,
agents, attorneys and Affiliates harmless from and against all Damages asserted
against or incurred by such indemnitees by reason of or resulting from a breach
of any representation, warranty or covenant of the Company contained herein, in
any exhibit, schedule, certificate or financial statement delivered hereunder,
or in any agreement executed by the Company in connection with the transactions
contemplated hereby. The Company shall only be liable for Damages if the
Closing does not occur. Any liability of the Company shall in no way affect the
liability of any Stockholder.
In the event any Stockholder is required to provide indemnification
pursuant to this Section 12.01 other than with respect to Damages relating to
Sections 3.09 and 3.10, such indemnification shall in no event exceed the fair
market value of the ENSERCH Shares received by such Stockholder, as measured by
the closing price of ENSERCH Common Stock on the New York Stock Exchange on the
Closing Date.
Section 12.02. Indemnification by ENSERCH. Subject to the terms and
conditions of this Article, ENSERCH hereby agrees to indemnify, defend and hold
the Stockholders and their agents, attorneys and Affiliates harmless from and
against all Damages asserted against or incurred by any of such indemnitees by
reason of or resulting from a breach of any representation, warranty or covenant
of ENSERCH contained herein or in any exhibit, schedule or certificate delivered
hereunder, or in any agreement executed in connection with the transactions
contemplated hereby.
In the event ENSERCH is required to provide indemnification pursuant to
this Section 12.02, such indemnification shall in no event exceed the fair
market value of the ENSERCH Shares as measured by the closing price of ENSERCH
Common Stock on the New York Stock Exchange on the Closing Date.
Section 12.03. Conditions of Indemnification. The respective obligations
and liabilities of the Stockholders and ENSERCH (the "indemnifying party") to
ENSERCH and the Stockholders, respectively (the "party to be indemnified"),
under Sections 12.01 and 12.02 with respect to claims resulting from the
assertion of liability by third parties shall be subject to the following terms
and conditions:
(a) Within 20 days (or such earlier time as might be required to avoid
prejudicing the indemnifying party's position) after receipt of notice of
commencement of any action evidenced by service of process or other legal
pleading, the party to be indemnified shall give the indemnifying party written
notice thereof together with a copy of such claim, process or other legal
pleading, and the indemnifying party shall have the right to undertake the
defense thereof by representatives of its own choosing and at its own expense;
provided that the party to be indemnified may participate in the defense with
counsel of its own choice, the fees and expenses of which counsel shall be paid
by the party to be indemnified unless (i) the indemnifying party has agreed to
pay such fees and expenses, (ii) the indemnifying party has failed to assume the
defense of such action or (iii) the named parties to any such action (including
any impleaded parties) include both the indemnifying party and the party to be
indemnified and the party to be indemnified has been advised by counsel that
there may be one or more legal defenses available to it that are different from
or additional to those available to the indemnifying party (in which case, if
the party to be indemnified informs the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the party to be indemnified, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at
any time for the party to be indemnified, which firm shall be designated in
writing by the party to be indemnified). Notwithstanding the other provisions
of this subsection (a), the indemnifying party will not be obligated to pay the
fees and expenses of more than one counsel with respect to any claim, unless in
the reasonable judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other indemnified party with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of one additional counsel.
(b) In the event that the indemnifying party, by the 30th day after
receipt of notice of any such claim (or, if earlier, by the 10th day preceding
the day on which an answer or other pleading must be served in order to prevent
judgment by default in favor of the person asserting such claim), does not elect
to defend against such claim, the party to be indemnified shall (upon further
notice to the indemnifying party) have the right to undertake the defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party and at the indemnifying party's expense, subject to
the right of the indemnifying party to assume the defense of such claims at any
time prior to settlement, compromise or final determination thereof.
(c) Notwithstanding the foregoing, the indemnifying party shall not
settle any claim without the consent of the party to be indemnified unless such
settlement involves only the payment of money and the claimant provides to the
party to be indemnified a release from all liability in respect of such claim.
If the settlement of the claim involves more than the payment of money, the
indemnifying party shall not settle the claim without the prior consent of the
party to be indemnified.
(d) The party to be indemnified and the indemnifying party shall each
cooperate with all reasonable requests of the other.
Section 12.04. Waiver. No waiver by any party of any default or breach by
another party of any representation, warranty, covenant or condition contained
in this Agreement, any exhibit or any document, instrument or certificate
contemplated hereby shall be deemed to be a waiver of any subsequent default or
breach by such party of the same or any other representation, warranty, covenant
or condition. No act, delay, omission or course of dealing on the part of any
party in exercising any right, power or remedy under this Agreement or at law or
in equity shall operate as a waiver thereof or otherwise prejudice any of such
party's rights, powers and remedies. All remedies, whether at law or in equity,
shall be cumulative and the election of any one or more shall not constitute a
waiver of the right to pursue other available remedies.
Section 12.05. Remedies Not Exclusive. The remedies provided in this
Article shall not be exclusive of any other rights or remedies available to one
party against the other, either at law or in equity.
Section 12.06. Costs, Expenses and Legal Fees. Whether or not the
transactions contemplated hereby are consummated, each party hereto shall bear
its own costs and expenses (including attorneys' fees and expenses), except that
each party hereto that is shown to have breached this Agreement or any other
agreement contemplated hereby agrees to pay the costs and expenses (including
reasonable attorneys' fees and expenses) incurred by any other party in
successfully (i) enforcing any of the terms of this Agreement or any other
agreement contemplated hereby against such breaching party or (ii) proving that
another party breached any of the terms of this Agreement or any other agreement
contemplated hereby.
Section 12.07. Specific Performance. the Company and the Stockholders
acknowledge that a refusal by the Company or the Stockholders to consummate the
transactions contemplated hereby shall cause irreparable harm to ENSERCH, for
which there may be no adequate remedy at law and for which the ascertainment of
damages would be difficult. Therefore, ENSERCH shall be entitled, in addition
to, and without having to prove the inadequacy of, other remedies at law, to
specific performance of this Agreement, as well as injunctive relief (without
being required to post bond or other security).
ARTICLE XIII.
Termination
Section 13.01. Termination. This Agreement may be terminated:
(a) At any time prior to August 31, 1995, by mutual agreement of all
parties.
(b) At any time prior to August 31, 1995, by ENSERCH if any
representation or warranty of the Company or the Stockholders contained in this
Agreement or in any certificate or other document executed and delivered by the
Company pursuant to this Agreement is or becomes untrue or breached in any
material respect or if the Company or the Stockholders fail to comply in any
material respect with any covenant contained herein, and any such
misrepresentation, noncompliance or breach is not cured, waived or eliminated
within ten business days after notice by ENSERCH.
(c) At any time prior to August 31, 1995, by the Company if any
representation or warranty of ENSERCH contained in this Agreement or in any
certificate or other document executed and delivered by ENSERCH pursuant to this
Agreement is or becomes untrue or breached in any material respect or if ENSERCH
fails to comply in any material respect with any covenant contained herein, and
any such misrepresentation, noncompliance or breach is not cured, waived or
eliminated within ten business days after notice by the Company.
(d) After August 31, 1995, by ENSERCH if the conditions stated in Article
VII or Article IX have not been satisfied by the Closing Date.
(e) After August 31, 1995, by the Stockholders if the conditions stated
in Article VIII have not been satisfied by the Closing Date.
In the event this Agreement is terminated pursuant to subparagraph (b), (c), (d)
or (e) above, ENSERCH, the Company and the Stockholders shall each be entitled
to pursue, exercise and enforce any and all remedies, rights, powers and
privileges available at law or in equity. In the event of a termination of this
Agreement under the provisions of this Article, a party not then in material
breach of this Agreement shall stand fully released and discharged of any and
all obligations under this Agreement.
ARTICLE XIV.
Miscellaneous
Section 14.01. Amendment. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by all the parties
hereto.
Section 14.02. Assignment. Neither this Agreement nor any right created
hereby or in any agreement entered into in connection with the transactions
contemplated hereby shall be assignable by any party hereto, except by ENSERCH
to an Affiliate of ENSERCH. In the event of an assignment by ENSERCH to an
Affiliate of ENSERCH, ENSERCH shall remain liable for all of its obligations
hereunder.
Section 14.03. Parties In Interest; No Third Party Beneficiaries. Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto. Neither this
Agreement nor any other agreement contemplated hereby shall be deemed to confer
upon any person not a party hereto or thereto any rights or remedies hereunder
or thereunder.
Section 14.04. Entire Agreement. This Agreement and the agreements
contemplated hereby constitute the entire agreement of the parties regarding the
subject matter hereof, and supersede all prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
Section 14.05. Severability. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining provi-
sions hereof shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as part of this Agreement a provision as similar in
its terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable.
Section 14.06. Survival of Representations, Warranties and Covenants. The
representations and warranties contained in Sections 3.01, 3.02, 3.10, 4.01,
4.02 and 4.05 shall survive the Closing indefinitely. The covenants con-
tained in Articles V, VI and XI and the representations and warranties contained
in Articles III and IV (other than Sections 3.01, 3.02, 3.10, 4.01, 4.02 and
4.05) shall survive the Closing for a period of two years. All other represen-
tations, warranties and covenants contained herein shall not survive the
Closing.
Section 14.07. Governing Law. This Agreement and the rights and obli-
gations of the parties hereto shall be governed by and construed and enforced
in accordance with the substantive laws (but not the rules governing conflicts
of laws) of the State of Texas. The parties agree that this Agreement shall be
performable in Dallas County, Texas.
Section 14.08. Captions. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise affect any of the
terms or provisions hereof.
Section 14.09. Gender and Number. When the context requires, the gender
of all words used herein shall include the masculine, feminine and neuter and
the number of all words shall include the singular and plural.
Section 14.10. Reference to Agreement. Use of the words "herein",
"hereof", "hereto" and the like in this Agreement shall be construed as
references to this Agreement as a whole and not to any particular Article,
Section or provision of this Agreement, unless otherwise noted.
Section 14.11. Confidentiality; Publicity and Disclosures. Each party
shall keep this Agreement and its terms confidential, and shall make no press
release or public disclosure, either written or oral, regarding the transactions
contemplated by this Agreement without the prior knowledge and consent of the
other parties hereto; provided that the foregoing shall not prohibit any
disclosure (i) by press release, filing or otherwise that is required by federal
securities laws or the rules of the New York Stock Exchange (however, ENSERCH
shall use its best efforts to give the Stockholders a copy of such a disclosure
at the same time it is released to the public) and (ii) to attorneys,
accountants, investment bankers or other agents of the parties assisting the
parties in connection with the transactions contemplated by this Agreement.
Section 14.12. Notice. Any notice or communication hereunder or in any
agreement entered into in connection with the transactions contemplated hereby
must be in writing and given by depositing the same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering the same in person or
by facsimile transmission. Such notice shall be deemed received on the date on
which it is hand-delivered or received by facsimile transmission or on the third
business day following the date on which it is so mailed. For purposes of
notice, the addresses of the parties shall be:
If to ENSERCH: ENSERCH Corporation
ENSERCH Center
300 South St. Paul Street
Dallas, Texas 75201
Attention: Michael G. Fortado
Fax No. (214) 670-2097
with a copy to: Jackson & Walker, L.L.P.
901 Main Street
Suite 6000
Dallas, Texas 75202
Attention: Fred W. Fulton
Fax No. (214) 653-6115
If to Carroll, The Phoenix Tower
Carroll Group, 3200 Southwest Freeway
a Trust, Gibbs or Suite 3100
Gates: Houston, Texas 77027
Attention: Jonathan Carroll
Fax No. (713) 622-2345
with a copy to: Akin, Gump, Strauss, Hauer & Feld, L.L.P.
711 Louisiana, Suite 1800
Houston, Texas 77002
Attention: Douglas C. Atnipp
Fax No. (713) 236-0822
If to Apollo or Apollo Advisors, L.P.
Savant: 1999 Avenue of the Stars
Suite 1900
Los Angeles, California 90067
Attention: Michael D. Weiner
Fax No. (310) 201-4166
Any party may change its address for notice by written notice given to the other
parties in accordance with this Section.
Section 14.13. Choice of Forum. The parties hereto agree that should any
suit, action or proceeding arising out of this Agreement be instituted by any
party hereto (other than a suit, action or proceeding to enforce or realize upon
any final court judgment arising out of this Agreement), such suit, action or
proceeding shall be instituted only in a state or federal court in Dallas
County, Texas. Each of the parties hereto consents to the in personam jurisdic-
tion of any state or federal court in Dallas County, Texas and waives any
objection to the venue of any such suit, action or proceeding. The parties
hereto recognize that courts outside Dallas County, Texas may also have juris-
diction over suits, actions or proceedings arising out of this Agreement, and in
the event that any party hereto shall institute a proceeding involving this
Agreement in a jurisdiction outside Dallas County, Texas, the party instituting
such proceeding shall indemnify any other party hereto for any losses and
expenses that may result from the breach of the foregoing covenant to institute
such proceeding only in a state or federal court in Dallas County, Texas,
including without limitation any additional expenses incurred as a result of
litigating in another jurisdiction, such as reasonable fees and expenses of
local counsel and travel and lodging expenses for parties, witnesses, experts
and support personnel.
Section 14.14. Service of Process. Service of any and all process that
may be served on any party hereto in any suit, action or proceeding arising out
of this Agreement may be made in the manner and to the address set forth in
Section 14.12 and service thus made shall be taken and held to be valid personal
service upon such party by any party hereto on whose behalf such service is
made.
Section 14.15. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
Section 14.16. Effective Closing Date. The transactions contemplated by
this Agreement shall be deemed to have been completed on June 30, 1995, for
accounting and tax purposes. However, where the Agreement refers to the Closing
or the Closing Date, such date shall be the actual date of the closing and shall
not be deemed to be June 30, 1995. The calendar month used for establishing the
financial results covering at least 30 days of post-Closing combined operations
of ENSERCH and the Company upon which the Earnings Release is based shall be the
calendar month during which the Closing actually occurs.
<PAGE>
EXECUTED as of the date first above written.
ENSERCH Corporation
By: /s/ G. R. Bryan
Its: Senior Vice President
DGS Holdings Corp.
By: /s/ Jonathan P. Carroll
Its: President
Carroll Group, Inc.
By: /s/ Jonathan P. Carroll
Jonathan P. Carroll, President
/s/ Jonathan P. Carroll
Jonathan P. Carroll
Jonathan Pitts Carroll 1995
Grantor Annuity Trust
By: /s/ Napoleon Davis
Napoleon Davis, Trustee
Gina Leanne Carroll 1995
Grantor Annuity Trust
By: /s/ Napoleon Davis
Napoleon Davis, Trustee
Jonathan and Gina Carroll
1995 Family Trust
By /s/ Napoleon Davis
Napoleon Davis, Trustee
Savant Enterprises Partners, L.P.
By: AIF II, L.P.,
Its General Partner
By: Apollo Advisors, L.P.,
Its Managing General Partner
By: Apollo Capital Management,
Inc.,
Its General Partner
By: /s/
Vice President
Apollo Investment Fund, L.P.
By: Apollo Advisors, L.P.,
Its Managing General Partner
By: Apollo Capital Management,
Inc.,
Its General Partner
By: /s/
Vice President
/s/ Michael C. Gibbs
Michael C. Gibbs
/s/ Kevin Gates
Kevin Gates
<PAGE>
EXHIBIT 15
ENSERCH Corporation:
We have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited condensed interim
financial information of ENSERCH Corporation for the periods ended March 31,
1995 and 1994, as indicated in our report dated April 26, 1995; because we did
not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which was included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, is being
incorporated by reference in this Registration Statement.
We are also aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act, is not considered a part of the Registration Statement
prepared or certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of that Act.
August 4, 1995
Dallas, Texas
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
ENSERCH Corporation on Form S-3 of our report dated February 10, 1995, appearing
in the Annual Report on Form 10-K of ENSERCH Corporation for the year ended
December 31, 1994, and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
August 4, 1995
Dallas, Texas
<PAGE>
EXHIBIT 23.2
DeGolyer and MacNaughton
One Energy Square
Dallas, Texas 75206
August 7, 1995
ENSERCH Corporation
ENSERCH Center
300 South St. Paul
Dallas, Texas 75201
Gentlemen:
We hereby consent to the use in the Registration Statement on Form S-3
to be filed on or about August 7, 1995, and related prospectus of ENSERCH
Corporation of information from the following: (1) "Report as of January 1,
1995 on Proved and Probable Reserves of Certain Properties owned by Enserch
Exploration, Inc."; (2) "Report as of March 1, 1995 on the Gross Reserves of
the Green Canyon Block 254 Field owned by Enserch Exploration, Inc.";
(3) "Report as of January 1, 1995 on the Proved, Probable, and Possible
Reserves of the Mudi Field in East Java, Republic of Indonesia, attributable
to Enserch Far East, Ltd."; (4) "Report as of January 1, 1995 on Proved
Reserves of the SACROC Unit, Kelly Snyder Field in Scurry County, Texas
owned by ENSERCH Corporation" contained in the ENSERCH Corporation Form 10-K
for the year ended December 31, 1994, and to the reference to us in the
"Experts" section of such Registration Statement and prospectus.
Very truly yours,
/s/ DeGolyer and MacNaughton
DeGolyer and MacNaughton
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of ENSERCH Corporation on Form S-3
of our report on the financial statements of DALEN Corporation as of
December 31, 1994 and 1993, and for the three years in the period ended
December 31, 1994, dated February 24, 1995, included in the Form 8-K of
ENSERCH Corporation dated May 26, 1995, and to all references to our firm
included in this Registration Statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
August 4, 1995
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
As independent petroleum engineers, we hereby consent to the incorporation
by reference in ENSERCH Corporation's Registration Statement on Form S-3 of our
estimates of proven oil and gas reserves of DALEN Corporation as of December 31,
1994, included in your Form 8-K dated May 26, 1995, and to the reference to our
firm included in this Registration Statement.
NETHERLAND, SEWELL & ASSOCIATES, INC.
Dallas, Texas
August 2, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ Frederick S. Addy
--------------------------------
Frederick S. Addy
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director or officer,
or both, of the Corporation, does hereby appoint W. T. Satterwhite his true and
lawful attorney with full power of substitution and resubstitution, to execute
in his name, place and stead in his capacity as a director or officer, or both,
of the Corporation, said Registration Statement and any and all amendments
thereto and all instruments necessary or incidental in connection therewith and
to file the same with the Commission. Said attorney shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st ay of August, 1995.
/s/ D. W. Biegler
---------------------------
D. W. Biegler
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ B. A. Bridgewater, Jr.
------------------------------------
B. A. Bridgewater, Jr.
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ Odie C. Donald
---------------------------
Odie C. Donald
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ Marvin J. Girouard
-------------------------------
Marvin J. Girouard
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ Thomas W. Luce, III
------------------------------------
Thomas W. Luce, III
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as a director of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ W. C. McCord
------------------------------------
W. C. McCord
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in her capacity as a director of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, her true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in her name, place and stead in her capacity as a director of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ Diana Natalicio
-----------------------------------
Diana Natalicio
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as an officer of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as an officer of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ S. R. Singer
----------------------------------
S. R. Singer
<PAGE>
<PAGE>
POWER OF ATTORNEY
WHEREAS ENSERCH Corporation, a Texas corporation (the "Corporation"),
intends to file with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, a Registration Statement,
including a Prospectus, with such amendment or amendments thereto in each case
as may be necessary or appropriate, together with any and all exhibits and other
documents having relation to said Registration Statement in connection with the
registration of common stock of this Corporation;
NOW, THEREFORE, the undersigned in his capacity as an officer of the
Corporation, does hereby appoint D. W. Biegler or W. T. Satterwhite, and each of
them severally, his true and lawful attorney or attorneys with power to act with
or without the other and with full power of substitution and resubstitution, to
execute in his name, place and stead in his capacity as an officer of the
Corporation, said Registration Statement and any and all amendments thereto and
all instruments necessary or incidental in connection therewith and to file the
same with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned in any
and all capacities every act whatsoever necessary or desirable to be done in the
premises as fully and to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and approving the acts of
said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on this
1st day of August, 1995.
/s/ J. W. Pinkerton
----------------------------------
J. W. Pinkerton
