Exhibit 1(b)
TXU CAPITAL I
Securities due ,
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UNDERWRITING AGREEMENT
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, 1998
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Name
as Representatives of the Underwriters
named in Schedule II hereto (the "Representatives")
c/o Name
Address
Ladies and Gentlemen:
1. Introduction. Texas Utilities Company, a Texas
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corporation (the "Company") and its financing subsidiary, TXU
Capital I, a Delaware business trust (the "Trust," and
hereinafter, together with the Company, the "Offerors"), propose
for the Trust to issue and sell severally to the underwriters
named in Schedule II hereto (the "Underwriters") the Trust's
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Securities of the series designation, with the
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terms and in the liquidation preference amount specified in
Schedule I hereto (the "Preferred Trust Securities").
2. Description of Preferred Trust Securities. The
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Offerors propose for the Trust to issue the Preferred Trust
Securities pursuant to an Amended and Restated Trust Agreement,
to be dated as of , 1998, among The Bank of New York,
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as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, certain employees of the Company, as Administrative
Trustees, and the several Holders as defined therein in
substantially the form heretofore delivered to you as the
Representatives, said Agreement being hereinafter referred to as
the "Trust Agreement". In connection with the issuance of the
Preferred Trust Securities, the Company proposes (i) to issue its
Junior Subordinated Debentures, Series A (the "Debentures")
pursuant to an Indenture, dated as of , 1998, between
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the Company and The Bank of New York, as trustee (the
"Indenture") and (ii) to issue a guarantee of the Capital
Securities to the extent described in the Prospectus (as defined
below) (the "Guarantee").
3. Representations and Warranties of the Offerors.
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The Offerors represent and warrant to the several Underwriters
that:
(a) The Offerors have filed with the Securities and
Exchange Commission (the "Commission") a registration
statement on Form S-3, including a prospectus, on
, 1998 (Registration Nos. 333- and
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333- -01) for the registration under the
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Securities Act of 1933, as amended (the "Securities Act") of
$400,000,000 aggregate amount of (i) the Company's unsecured
debt securities and (ii) the preferred trust securities
("Trust Securities") of the Trust, an equal principal amount
of the Company's junior subordinated debentures and
guarantees and other obligations of the Company in respect
of the Trust Securities. Such registration statement
("Registration Statement Nos. 333- and 333-
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-01") was declared effective by the Commission on
, 1998. References herein to the term
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"Registration Statement" as of any date shall be deemed to
refer to Registration Statement Nos. 333- and 333-
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-01, as amended or supplemented to such date,
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including all documents incorporated by reference therein as
of such date pursuant to Item 12 of Form S-3 ("Incorporated
Documents"); provided that if the Company files a
registration statement with the Commission pursuant to
Section 462(b) of the Securities Act (the "Rule 462(b)
Registration Statement"), then after such filing, all
references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement. References
herein to the term "Prospectus" as of any given date shall
be deemed to refer to the prospectus, including any
preliminary prospectus, forming a part of Registration
Statement Nos. 333- and 333- -01, as amended
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or supplemented as of such date, including all Incorporated
Documents as of such date and including any prospectus
supplement relating to the Preferred Trust Securities.
References herein to the term "Effective Date" shall be
deemed to refer to the later of the time and date
Registration Statement Nos. 333- and 333-
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-01, any post-effective amendment to Registration Statement
Nos. 333- and 333- -01 or any Rule
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462(b) Registration Statement was declared effective or the
time and date of the filing thereafter of the Company's most
recent Annual Report on Form 10-K if such filing is made
prior to the Closing Date, as hereinafter defined. The
Company will not file any amendment to the Registration
Statement or supplement to the Prospectus on or after the
date of this Agreement and prior to the Closing Date, as
hereinafter defined, without prior notice to the
Underwriters, or to which Counsel for the Underwriters shall
reasonably object in writing. For the purposes of this
Agreement, any Incorporated Document filed with the
Commission on or after the date of this Agreement and prior
to the Closing Date, as hereinafter defined, shall be deemed
an amendment or supplement to the Registration Statement and
the Prospectus.
(b) On the Effective Date, the Registration Statement
and the Prospectus fully complied and at the Closing Date,
as hereinafter defined, the Registration Statement, the
Prospectus, the Trust Agreement, the Indenture and the
Guarantee will fully comply in all material respects with
the applicable provisions of the Securities Act, the Trust
Indenture Act of 1939, as amended ("Trust Indenture Act"),
and the applicable rules and regulations of the Commission
thereunder; on the Effective Date the Registration Statement
did not, and at the Closing Date, as hereinafter defined,
the Registration Statement will not, contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; on the Effective Date the
Prospectus did not, and at the Closing Date, as hereinafter
defined, and on the date it is filed with the Commission
pursuant to Rule 424 of the General Rules and Regulations of
the Securities Act ("Rule 424"), the Prospectus will not,
contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and on said dates the
Incorporated Documents, taken together as a whole, fully
complied or will fully comply in all material respects with
the applicable provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the applicable
rules and regulations of the Commission thereunder, and,
when read together with the Prospectus on said dates did not
and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided that the foregoing representations and
warranties in this paragraph (b) shall not apply to
statements or omissions made in reliance upon information
furnished in writing to the Company by, or on behalf of, any
Underwriter for use in connection with the preparation of
the Registration Statement or the Prospectus or to any
statements in or omissions from the Statements of
Eligibility and Qualification under the Trust Indenture Act,
or amendments thereto, filed as exhibits to the Registration
Statement.
(c) The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will
not result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust, charter, by-laws or other agreement or instrument
to which the Company or the Trust is now a party.
(d) Each direct and indirect material subsidiary of
the Company has been incorporated and is validly existing as
a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power
and authority to own, lease and operate its properties and
to conduct its business as currently conducted and as set
forth in or contemplated by the Prospectus, and is qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify or be in good standing would not have
a material adverse effect on the business, property or
financial condition of the Company and its subsidiaries,
considered as a whole. Except as otherwise set forth in or
contemplated by the Registration Statement and the
Prospectus, all of the issued and outstanding shares of
capital stock of direct and indirect material subsidiaries
of the Company have been authorized and validly issued, are
fully paid and non-assessable and (except for any directors'
qualifying shares) are owned by the Company, directly or
through its subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity other than those ordinary shares of TU Finance (No.
2) Limited, TU Acquisitions PLC, The Energy Group Limited
and Energy Holdings (No. 3) Limited (formerly known as The
Energy Group PLC) ("Energy Holdings") which have been
pledged as collateral for borrowings made by subsidiaries.
None of the outstanding shares of capital stock of such
material subsidiaries was issued in violation of preemptive
or other similar rights arising by operation of law, under
the charter or by-laws of any subsidiary or under any
agreement to which the Company or any subsidiary is a party.
4. Purchase and Sale.
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(a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions
herein set forth, the Trust shall sell to each of the
Underwriters, and each Underwriter shall purchase from the
Trust, at the time and place herein specified, severally and
not jointly, the respective liquidation preference amount of
the Preferred Trust Securities set forth opposite the name
of such Underwriter in Schedule II attached hereto, at the
purchase price or prices set forth in Schedule I hereto.
(b) The Company shall pay to the Underwriters a
commission equal to % of the aggregate liquidation
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preference amount of the Preferred Trust Securities.
5. Time and Place of Closing. Delivery of the
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Preferred Trust Securities against payment therefor by wire
transfer in federal funds shall be made at the office of Thelen
Reid & Priest LLP, 40 West 57th Street, New York, New York, at
10:00 A.M., New York Time, on , 1998, or at such other
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place, time and date as shall be agreed upon in writing by the
Company and you or established in accordance with the following
paragraph. The hour and date of such delivery and payment are
herein called the "Closing Date". The Preferred Trust Securities
shall be delivered to The Depositary Trust Company or to The Bank
of New York, as custodian for The Depositary Trust Company, in
fully registered global form registered in the name of Cede & Co.
for the respective accounts specified by you not later than the
close of business on the business day preceding the Closing Date.
The Trust agrees to make the Preferred Trust Securities available
to you for checking purposes not later than 10:00 A.M., New York
Time, on the last business day preceding the Closing Date at the
office of Thelen Reid & Priest, 40 West 57th Street, New York,
New York, 10019, or at such other place as the Trust may specify.
If any Underwriter shall fail or refuse (otherwise than
for some reason sufficient to justify, in accordance with the
terms hereof, the cancellation or termination of its obligations
hereunder) to purchase and pay for the liquidation preference
amount of the Preferred Trust Securities that such Underwriter
has agreed to purchase and pay for hereunder, the Company shall
immediately give notice to the other Underwriters of the default
of such Underwriter, and the other Underwriters shall have the
right within 24 hours after the receipt of such notice to
determine to purchase, or to procure one or more others, who are
members of the National Association of Securities Dealers, Inc.
("NASD") (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no sales
within the United States, its territories or its possessions or
to persons who are citizens thereof or residents therein and (ii)
in making sales to comply with the NASD's Conduct Rules) and
satisfactory to the Company, to purchase, upon the terms herein
set forth, the liquidation preference amount of the Preferred
Trust Securities that the defaulting Underwriter had agreed to
purchase. If any non-defaulting Underwriter or Underwriters
shall determine to exercise such right, such Underwriter or
Underwriters shall give written notice to the Company of the
determination in that regard within 24 hours after receipt of
notice of any such default, and thereupon the Closing Date shall
be postponed for such period, not exceeding three business days,
as the Company shall determine. If in the event of such a
default no non-defaulting Underwriter shall give such notice,
then this Agreement may be terminated by the Company, upon like
notice given to the non-defaulting Underwriters, within a further
period of 24 hours. If in such case the Company shall not elect
to terminate this Agreement it shall have the right, irrespective
of such default:
(a) to require each non-defaulting Underwriter to
purchase and pay for the respective liquidation preference
amount of the Preferred Trust Securities that it had agreed
to purchase hereunder as hereinabove provided and, in
addition, the liquidation preference amount of the Preferred
Trust Securities that the defaulting Underwriter shall have
so failed to purchase up to a liquidation preference amount
thereof equal to one-ninth (1/9) of the liquidation
preference amount of Preferred Trust Securities that such
non-defaulting Underwriter has otherwise agreed to purchase
hereunder, and/or
(b) to procure one or more persons, reasonably
acceptable to the Representatives, who are members of the
NASD (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no
sales within the United States, its territories or its
possessions or to persons who are citizens thereof or
residents therein and (ii) in making sales to comply with
the NASD's Conduct Rules), to purchase, upon the terms
herein set forth, either all or a part of the liquidation
preference amount of the Preferred Trust Securities that
such defaulting Underwriter had agreed to purchase or that
portion thereof that the remaining Underwriters shall not be
obligated to purchase pursuant to the foregoing clause (a).
In the event the Company shall exercise its rights under (a)
and/or (b) above, the Company shall give written notice thereof
to the non-defaulting Underwriters within such further period of
24 hours, and thereupon the Closing Date shall be postponed for
such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred
to in this Section 5, there shall be excluded a period of 24
hours in respect of each Saturday, Sunday or legal holiday that
would otherwise be included in such period of time.
Any action taken by the Company under this Section 5
shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
Termination by the Company under this Section 5 shall be without
any liability on the part of the Company or any non-defaulting
Underwriter, except as otherwise provided in Sections 6(g) and 9
hereof.
6. Covenants of the Company. The Company agrees
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that:
(a) It will promptly deliver to each of you a signed
copy of the Registration Statement as originally filed or,
to the extent a signed copy is not available, a conformed
copy, certified by an officer of the Company to be in the
form as originally filed, including all Incorporated
Documents and exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable
after the date hereof, as many copies of the Prospectus as
of such date as you may reasonably request.
(c) It will cause the Prospectus to be filed with the
Commission pursuant to Rule 424 as soon as practicable and
advise you of the issuance of any stop order under the
Securities Act with respect to the Registration Statement or
the institution of any proceedings therefor of which the
Offerors shall have received notice. The Company will use
its best efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof if issued.
(d) If, during such period of time (not exceeding nine
months) after the Prospectus has been filed with the
Commission pursuant to Rule 424 as in the opinion of Counsel
for the Underwriters a prospectus covering the Preferred
Trust Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event
relating to or affecting the Company or the Trust or of
which the Company shall be advised in writing by you shall
occur that in the Company's reasonable opinion after
consultation with Counsel for the Underwriters should be set
forth in a supplement to, or an amendment of, the Prospectus
in order to make the Prospectus not misleading in the light
of the circumstances when it is delivered to a purchaser,
the Company will, at its expense, amend or supplement the
Prospectus by either (i) preparing and furnishing to you at
the Company's expense a reasonable number of copies of a
supplement or supplements or an amendment or amendments to
the Prospectus or (ii) making an appropriate filing pursuant
to Section 13 of the Exchange Act, which will supplement or
amend the Prospectus so that, as supplemented or amended, it
will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not
misleading; provided that should such event relate solely to
the activities of any of the Underwriters, then the
Underwriters shall assume the expense of preparing and fur-
nishing any such amendment or supplement. In case any
Underwriter is required to deliver a prospectus after the
expiration of nine months from the date the Prospectus is
filed with the Commission pursuant to Rule 424, the Company,
upon such Underwriter's request, will furnish to such
Underwriter, at the expense of such Underwriter, a
reasonable quantity of a supplemental prospectus or
supplements to the Prospectus complying with Section 10(a)
of the Securities Act.
(e) It will make generally available to its security
holders and the security holders of the Trust, as soon as
practicable, an earnings statement (which need not be
audited) covering a period of at least twelve months
beginning not earlier than the first day of the month next
succeeding the month in which occurred the effective date of
the Registration Statement as defined in Rule 158 under the
Securities Act.
(f) It will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the
Preferred Trust Securities for offer and sale under the
blue-sky laws of such jurisdictions as you may designate,
provided that the neither of the Offerors shall be required
to qualify as a foreign corporation or dealer in securities,
to file any consents to service of process under the laws of
any jurisdiction, or to meet any other requirements deemed
by the Offerors to be unduly burdensome.
(g) It will, except as herein provided, pay all
expenses and taxes (except transfer taxes) in connection
with (i) the preparation and filing by it of the
Registration Statement, (ii) the issuance and delivery of
the Preferred Trust Securities as provided in Section 5
hereof, (iii) the qualification of the Preferred Trust
Securities under blue-sky laws (including counsel fees not
to exceed $7,500), and (iv) the printing and delivery to the
Underwriters of reasonable quantities of the Registration
Statement and, except as provided in Section 6(d) hereof, of
the Prospectus. The Company shall not, however, be required
to pay any amount for any expenses of yours or any of the
Underwriters, except that, if this Agreement shall be
terminated in accordance with the provisions of Section 7, 8
or 10 hereof, the Company will reimburse you for the fees
and disbursements of Counsel for the Underwriters, whose
fees and disbursements the Underwriters agree to pay in any
other event, and will reimburse the Underwriters for their
reasonable out-of-pocket expenses, in an aggregate amount
not exceeding $5,000, incurred in contemplation of the
performance of this Agreement. The Company shall not in any
event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits.
(h) During the period from the date of this Agreement
to the Closing Date, neither the Company nor the Trust will,
without the prior written consent of the Representatives,
directly or indirectly, publicly issue, sell, offer or
contract to sell, in the market in which the Preferred Trust
Securities are being offered and sold, any securities of the
Company or any of its subsidiaries or of the Trust which are
of the same class as the Preferred Trust Securities.
7. Conditions of Underwriters' Obligations. The
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obligations of the Underwriters to purchase and pay for the
Preferred Trust Securities shall be subject to the accuracy of
the representations and warranties made herein on the part of
each of the Offerors, to the performance by each of the Offerors
of its obligations to be performed hereunder prior to the Closing
Date, and to the following conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424 prior to 5:30 P.M., New York
Time, on the second business day after the date of this
Agreement, or such other time and date as may be approved by
you.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no
proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and you
shall have received a certificate, dated the Closing Date
and signed by an officer of the Company, to the effect that
no such stop order is in effect and that no proceedings for
such purpose are pending before, or to the knowledge of the
Company threatened by, the Commission.
(c) On the Closing Date, you shall have received from
Richards, Layton & Finger, P.A., Delaware counsel for the
Company and the Trust, Worsham, Forsythe & Wooldridge,
L.L.P., General Counsel for the Company, Thelen Reid &
Priest LLP, of counsel for the Company, and Winthrop,
Stimson, Putnam & Roberts, Counsel for the Underwriters,
opinions in substantially the form and substance prescribed
in Schedules III, IV, V and VI hereto (i) with such changes
therein as may be agreed upon by the Company and you, with
the approval of Counsel for the Underwriters, and (ii) if
the Prospectus relating to the Preferred Trust Securities
shall be supplemented or amended after the Prospectus shall
have been filed with the Commission pursuant to Rule 424,
with any changes therein necessary to reflect such
supplementation or amendment.
(d) On and as of the Closing Date, you shall have
received from Deloitte & Touche LLP a letter to the effect
that (i) they are independent certified public accountants
with respect to the Company, within the meaning of the
Securities Act and the related rules and regulations adopted
by the Commission thereunder, (ii) in their opinion, the
financial statements audited by them and included or
incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the related rules and
regulations adopted by the Commission thereunder, (iii) on
the basis of a reading of the unaudited amounts of operating
revenues and net income included or incorporated by
reference in the Prospectus and the related financial
statements from which these amounts were derived, the latest
available unaudited financial statements of the Company and
the minute books of the Company and inquiries of officers of
the Company who have responsibility for financial and
accounting matters (it being understood that the foregoing
procedures do not constitute an audit made in accordance
with generally accepted auditing standards and would not
necessarily reveal matters of significance with respect to
the comments made in such letter, and accordingly that
Deloitte & Touche LLP makes no representation as to the
sufficiency of such procedures for the several Underwriters'
purposes), nothing has come to their attention that caused
them to believe that (A) the unaudited financial statements
incorporated by reference in the Prospectus were not
determined in accordance with generally accepted accounting
principles applied on a basis substantially consistent with
that of the corresponding amounts in the latest available
audited financial statements, (B) the unaudited amounts of
operating revenues and net income of the Company included or
incorporated by reference in the Prospectus were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited statements of
income incorporated by reference in the Prospectus, (C) for
the twelve months ended December 31, 1998, if available,
there were any decreases in operating revenues or net income
as compared with the comparable period of the preceding
year, and (D) at a specified date not more than seven days
prior to the date of such letter, there was any change in
the capital stock of the Company, short-term bank loans,
commercial paper, notes payable or long-term debt of the
Company or decrease in its net assets, in each case as
compared with amounts shown in the most recent balance sheet
incorporated by reference in the Prospectus, except in all
instances for changes or decreases that the Prospectus
discloses have occurred or may occur or which are occasioned
by the declaration of a regular quarterly dividend or the
acquisition of long-term debt for sinking fund purposes, or
that are described in such letter, (iv) on the basis of a
reading of the unaudited condensed consolidated pro forma
balance sheet as of March 31, 1998, the unaudited condensed
consolidated pro forma statements of income for the twelve
months ended December 31, 1997, and the three months ended
March 31, 1998, included or incorporated by reference in the
Prospectus, and inquiries of certain officers of the Company
and Energy Holdings who have responsibility for financial
and accounting matters (it being understood that the
foregoing procedures are substantially less in scope than an
examination, the objective of which is the expression of an
opinion on management's assumptions, the pro forma
adjustments, and the application of those adjustments to
historical financial information and would not necessarily
reveal matters of significance with respect to the comments
made in such letter, and accordingly that Deloitte & Touche
LLP makes no representation as to the sufficiency of such
procedures for the Underwriters' purposes), nothing came to
their attention that caused them to believe that the
unaudited pro forma condensed consolidated financial
statements referred to above incorporated by reference in
the Prospectus did not comply as to form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and that the pro forma adjustments
had not been properly applied to the historical amounts in
the compilation of those statements, and (v) they have
compared the dollar amounts (or percentages or ratios
derived from such dollar amounts) and other financial
information included or incorporated by reference in the
Registration Statement and the Prospectus as reasonably
requested by you (in each case to the extent that such
dollar amounts, percentages and other financial information
are derived from the general accounting records of the
Company and its consolidated subsidiaries subject to the
internal controls of the Company's accounting system or are
derived indirectly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter, and have found such
dollar amounts, percentages and other financial information
to be in agreement with such results, except as otherwise
specified in such letter.
(e) On and as of the Closing Date you shall have
received from Ernst & Young a letter in form and substance
reasonably satisfactory to counsel to the Underwriters (i)
to the effect that they are independent auditors with
respect to Energy Holdings, within the meaning of the
Securities Act and the related rules and regulations adopted
by the Commission thereunder and (ii) with respect to the
financial information concerning Energy Holdings
incorporated by reference in the Prospectus.
(f) Since the most recent dates as of which in-
formation is given in the Registration Statement or the
Prospectus there shall not have been any material adverse
change in the business, property or financial condition of
the Company and its subsidiaries, considered as a whole,
whether or not in the ordinary course of business, and,
since such dates, there shall not have been any material
transaction entered into by the Company, other than transac-
tions in the ordinary course of business and transactions
contemplated by the Registration Statement or Prospectus,
and at the Closing Date you shall have received a
certificate to such effect dated the Closing Date and signed
by an officer of the Company.
(g) All legal proceedings to be taken in connection
with the issuance and sale of the Preferred Trust Securities
shall have been satisfactory in form and substance to Coun-
sel for the Underwriters.
In case any of the conditions specified above in this
Section 7 shall not have been fulfilled, this Agreement may be
terminated by the Representatives upon notice thereof to the
Company. Any such termination shall be without liability of any
party to any other party except as otherwise provided in Sections
6(g) and 9 hereof.
8. Conditions of Offerors' Obligations. The
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obligation of the Offerors to deliver the Preferred Trust
Securities shall be subject to the conditions that the Prospectus
shall have been filed with the Commission pursuant to Rule 424
prior to 5:30 P.M., New York Time, on the second business day
after the date of this Agreement or such other time and date as
may be approved by the Company, and no stop order suspending the
effectiveness of the Registration Statement shall be in effect at
the Closing Date and no proceedings for that purpose shall be
pending before, or threatened by, the Commission at the Closing
Date. In case these conditions shall not have been fulfilled,
this Agreement may be terminated by the Company upon notice
thereof to you. Any such termination shall be without liability
of any party to any other party except as otherwise provided in
Sections 6(g) and 9 hereof.
9. Indemnification.
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(a) The Offerors shall jointly and severally
indemnify, defend and hold harmless each Underwriter and
each person who controls any Underwriter within the meaning
of Section 15 of the Securities Act from and against any and
all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject
under the Securities Act or any other statute or common law
and shall reimburse each such Underwriter and controlling
person for any legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees)
incurred by them in connection with investigating any such
losses, claims, damages or liabilities or in connection with
defending any actions, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement or the Prospectus, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
in the light of the circumstances under which they were made
not misleading; provided, however, that the indemnity
agreement contained in this Section 9 shall not apply to any
such losses, claims, damages, liabilities, expenses or
actions arising out of, or based upon, any such untrue
statement or alleged untrue statement, or any such omission
or alleged omission, if such statement or omission was made
in reliance upon and in conformity with information
furnished in writing to the Offerors by or on behalf of any
Underwriter, through the Representatives or Counsel for the
Underwriters, for use in connection with the preparation of
the Registration Statement or the Prospectus or any
amendment or supplement to either thereof, or arising out
of, or based upon, statements in or omissions from that part
of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust
Indenture Act of any Trustee with respect to any indenture
qualified pursuant to the Registration Statement; and
provided further, that the indemnity agreement contained in
this Section 9 shall not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter)
on account of any such losses, claims, damages, liabilities,
expenses or actions arising from the sale of the Preferred
Trust Securities to any person if a copy of the Prospectus
(exclusive of the Incorporated Documents) shall not have
been given or sent to such person by or on behalf of such
Underwriter with or prior to the written confirmation of the
sale involved unless the alleged omission or alleged untrue
statement was not corrected in the Prospectus at the time of
such written confirmation. The indemnity agreement of the
Offerors contained in this Section 9 and the representations
and warranties of the Offerors contained in Section 3 hereof
shall remain operative and in full force and effect
regardless of any termination of this Agreement or of any
investigation made by or on behalf of any Underwriter or any
such controlling person, and shall survive the delivery of
the Preferred Trust Securities.
(b) Each Underwriter shall indemnify, defend and hold
harmless the Offerors, their officers and directors, and
each person who controls either of the Offerors within the
meaning of Section 15 of the Securities Act, from and
against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become
subject under the Securities Act or any other statute or
common law and shall reimburse each of them for any legal or
other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the
Prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the
Offerors by or on behalf of such Underwriter, through the
Representatives or Counsel for the Underwriters, for use in
connection with the preparation of the Registration
Statement or the Prospectus or any amendment or supplement
to either thereof. Each Underwriter hereby furnishes to the
Offerors in writing expressly for use in the Prospectus
----
. The indemnity agreement of the
------------------------
respective Underwriters contained in this Section 9 shall
remain operative and in full force and effect regardless of
any termination of this Agreement or of any investigation
made by or on behalf of either Offeror, its directors or its
officers, any such Underwriter, or any such controlling
person, and shall survive the delivery of the Preferred
Trust Securities.
(c) The Company, the Trust and the several
Underwriters each shall, upon the receipt of notice of the
commencement of any action against it or any person
controlling it as aforesaid, in respect of which indemnity
may be sought on account of any indemnity agreement
contained herein, promptly give written notice of the
commencement thereof to the party or parties against whom
indemnity shall be sought hereunder, but the failure so to
notify such indemnifying party or parties of any such action
shall not relieve such indemnifying party or parties from
any liability hereunder to the extent it is not materially
prejudiced as a result of such failure to notify and in any
event shall not relieve it from any liability that it or
they may have to the indemnified party otherwise than on
account of such indemnity agreement. In case such notice of
any such action shall be so given, such indemnifying party
shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of such action,
in which event such defense shall be conducted by counsel
chosen by such indemnifying party or parties and
satisfactory to the indemnified party or parties who shall
be defendant or defendants in such action, and such
defendant or defendants shall bear the fees and expenses of
any additional counsel retained by them; but if the
indemnifying party shall elect not to assume the defense of
such action, such indemnifying party will reimburse such
indemnified party or parties for the reasonable fees and
expenses of any counsel retained by them; provided, however,
if the defendants in any such action (including impleaded
parties) include both the indemnified party and the
indemnifying party and counsel for the indemnified party
shall have reasonably concluded that there may be a conflict
of interest involved in the representation by a single
counsel of both the indemnifying party and the indemnified
party, the indemnified party or parties shall have the right
to select separate counsel, satisfactory to the indemnifying
party, whose fees and expenses shall be paid by such
indemnifying party (it being understood, however, that the
indemnifying party shall not be liable for the fees and
expenses of more than one separate counsel (in addition to
local counsel) representing the indemnified parties who are
parties to such action). Each of the Offerors and the
Underwriters agrees that without the other party's prior
written consent, which consent shall not be unreasonably
withheld, it will not settle, compromise or consent to the
entry of any judgment in any claim in respect of which
indemnification may be sought under the indemnification
provision of this Agreement, unless such settlement,
compromise or consent (i) includes an unconditional release
of such other party from all liability arising out of such
claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on
behalf of such other party.
(d) If the indemnification provided for in sub-
paragraph (a) or (b) above shall be unenforceable under
applicable law by an indemnified party, each indemnifying
party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages, liabilities
and expenses for which each such indemnification provided
for in subparagraph (a) or (b) above shall be unenforceable,
in such proportion as shall be appropriate to reflect (i)
the relative fault of each indemnifying party on the one
hand and the indemnified party on the other in connection
with the statements or omissions that have resulted in such
losses, claims, damages, liabilities and expenses, (ii) the
relative benefits received by the Offerors on the one hand
and the Underwriters on the other hand from the offering of
the Preferred Trust Securities pursuant to this Agreement,
and (iii) any other relevant equitable considerations;
provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party not guilty of such
fraudulent misrepresentation. Relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party
or the indemnified party and each such party's relative
intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The
Offerors and each of the Underwriters agree that it would
not be just and equitable if contributions pursuant to this
subparagraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of
allocation that does not take account of the equitable
considerations referred to above. Notwithstanding the
provisions of this Section 9, no Underwriter shall be
required to contribute in excess of the amount equal to the
excess of (i) the total price at which the Preferred Trust
Securities underwritten by it were offered to the public,
over (ii) the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged
omission. The obligations of each Underwriter to contribute
pursuant to this Section 9 are several and not joint and
shall be in proportion to the principal amount of Preferred
Trust Securities set forth opposite its name in Schedule II
hereto.
10. Termination. This Agreement may be terminated, at
-----------
any time prior to the Closing Date, by the Representatives
if (a) after the date hereof and at or prior to the Closing
Date there shall have occurred any suspension or material
limitation of trading of any of the Company's securities on
the New York Stock Exchange, Inc. ("NYSE") or any general
suspension of trading in securities on the NYSE, the
American Stock Exchange, Inc. ("AMEX") or the NASDAQ Stock
Market, Inc. ("NASDAQ") or there shall have been established
by the NYSE, AMEX or NASDAQ or by the Commission or by any
federal or state agency or by the decision of any court, any
general limitation on prices for such trading or any general
restrictions on the distribution of securities, or a general
banking moratorium declared by New York or federal
authorities, or (b) there shall have occurred any (i) new
material outbreak of hostilities or (ii) new material other
national or international calamity or crisis, including, but
not limited to, an escalation of hostilities that existed
prior to the date of this Agreement or (iii) material
adverse change in the financial markets in the United
States, and the effect of any such event specified in clause
(a) or (b) above on the financial markets of the United
States shall be such as to make it impracticable, in the
reasonable judgment of the Representatives, for the
Underwriters to enforce contracts for the sale of the
Preferred Trust Securities. This Agreement may also be
terminated at any time prior to the Closing Date by the
Representatives if, in their reasonable judgment, the
subject matter of any amendment or supplement to the
Registration Statement or the Prospectus (other than an
amendment or supplement relating solely to the activity of
any Underwriter or Underwriters) prepared and issued by the
Company after the effectiveness of this Agreement shall have
disclosed a material adverse change in the business,
property or financial condition of the Company and its
subsidiaries, considered as a whole, whether or not in the
ordinary course of business, that has materially impaired the
marketability of the Preferred Trust Securities. Any
termination hereof pursuant to this Section 10 shall be
without liability of any party to any other party except as
otherwise provided in Sections 6(g) and 9 hereof.
11. Miscellaneous. THE VALIDITY AND INTERPRETATION OF
-------------
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Agreement shall inure to the benefit of the Company,
the several Underwriters and, with respect to the provisions of
Section 9 hereof, each director, officer and controlling person
referred to in said Section 9, and their respective successors.
Nothing herein is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right,
remedy or claim under or in respect of any provision in this
Agreement. The term "successor" as used herein shall not include
any purchaser, as such purchaser, of any of the Preferred Trust
Securities from any of the several Underwriters.
12. Notices. All communications hereunder shall be in
-------
writing, and, if to the Underwriters, shall be mailed or
delivered to you at the address set forth above, or, if to the
Company, shall be mailed or delivered to it at 1601 Bryan Street,
Dallas, Texas 75201, Attention: Treasurer.
If the foregoing is in accordance with your
understanding of our agreement, please indicate your acceptance
thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding
agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
TEXAS UTILITIES COMPANY
By
-------------------------------
TXU CAPITAL I
By
-------------------------------
(Authorized Representative)
Accepted and delivered as of
the date first above written
[ ]
By: [ ]
By:
-----------------------------------
SCHEDULE I
----------
Underwriting Agreement dated:
Representatives:
Designation: Preferred Trust Securities
Liquidation Preference Amount:
Date of Maturity:
Distribution Rate:
Purchase Price: $ per Preferred Trust
------
Public Offering Price: $ per Preferred Trust
------
SCHEDULE II
-----------
TXU Capital I
Preferred Trust Securities due ,
---------- ----
Liquidation Amount of the
Name Preferred Trust Securities
---- --------------------------
$
$
$
-----------
Total $
============
SCHEDULE III
------------
[LETTERHEAD OF RICHARDS, LAYTON & FINGER, P.A.]
, 1998
----------
[Underwriters]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement, as herein defined
c/o [Name]
[Address]
Re: TXU Capital I
-------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Texas
Utilities Company, a Texas corporation (the "Company"), and TXU
Capital I, a Delaware business trust (the "Trust"), in connection
with the matters set forth herein. At your request, this opinion
is being furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(a) The Certificate of Trust of the Trust, dated as of
December 3, 1998 (the "Certificate"), as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary
of State") on December 3, 1998;
(b) The Trust Agreement of the Trust, dated as of
December 3, 1998, by and among the Company and the trustees of
the Trust named therein;
(c) The Prospectus, dated , 1998, and the
----------
Prospectus Supplement, dated , 1998 (jointly, the
----------
"Prospectus"), relating to the Preferred Trust Securities of the
Trust representing preferred undivided beneficial interests in
the assets of the Trust (each, a "Preferred Trust Security" and
collectively, the "Preferred Trust Securities");
(d) The Amended and Restated Trust Agreement of the
Trust, dated as of , 1998 (including Exhibits A, B and D
---------
thereto) (the "Trust Agreement"), among the Company, the trustees
of the Trust named therein (the "Trustees") and the holders, from
time to time, of undivided beneficial interests in the assets of
the Trust;
(e) The Underwriting Agreement, dated , 1998
----------
(the "Underwriting Agreement"), among the Company, the Trust and
the Underwriters named in Schedule II thereto; and
(f) A Certificate of Good Standing for the Trust,
dated , 1998, obtained from the Secretary of State.
----------
Initially capitalized terms used herein and not
otherwise defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a)
through (f) above, which we believe are all the documents
necessary or appropriate for us to have considered for the
purposes of rendering the opinions stated herein. In particular,
we have not reviewed any document (other than the documents
listed in paragraphs (a) through (f) above) that is referred to
in or incorporated by reference into the documents reviewed by
us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the
opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all
of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have
assumed (i) the authenticity of all documents submitted to us as
authentic originals, (ii) the conformity with the originals of
all documents submitted to us as copies or forms, and (iii) the
genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that
the Trust Agreement constitutes the entire agreement among the
parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation and termination
of the Trust, and that the Trust Agreement and the Certificate
are in full force and effect and have not been amended,
(ii) except to the extent provided in paragraph 1 below, the due
creation, due formation or due organization, as the case may be,
and the valid existence in good standing of each party to the
documents examined by us under the laws of the jurisdiction
governing its creation, formation or organization, (iii) the
legal capacity of natural persons who are parties to the
documents examined by us, (iv) except to the extent set forth in
paragraph 2 below, that each of the parties to the documents
examined by us has the power and authority to execute and
deliver, and to perform its obligations under, such documents,
(v) except to the extent provided in paragraph 4 below, that each
of the parties to the documents examined by us has duly
authorized, executed and delivered such documents, (vi) the
receipt by each Person to whom a Preferred Trust Security is to
be issued by the Trust (the "Preferred Trust Security Holders")
of a Preferred Trust Securities Certificate for the Preferred
Trust Security and the payment for the Preferred Trust Security
acquired by it, in accordance with the Trust Agreement, and as
described in the Prospectus, (vii) that the Preferred Trust
Securities are issued and sold to the Preferred Trust Security
Holders in accordance with the Trust Agreement, and as described
in the Prospectus, (viii) the receipt by the Person (the "Common
Security Holder") to whom a Common Security of the Trust
representing common undivided beneficial interests in the assets
of the Trust (each, a "Common Security" and collectively, the
"Common Securities") (the Preferred Trust Securities and the
Common Securities being hereinafter collectively referred to as
"Trust Securities") is to be issued by the Trust of a Common
Securities Certificate for the Common Security and the payment
for the Common Security acquired by it, in accordance with the
Trust Agreement, and as described in the Prospectus, (ix) that
the Common Securities are issued and sold to the Common Security
Holder in accordance with the Trust Agreement, and as described
in the Prospectus, (x) that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as
required by the Delaware Business Trust Act and filing documents
with the Secretary of State) or employees in the State of
Delaware, and (xi) that the Trust is treated as a grantor trust
for federal income tax purposes. We have not participated in the
preparation of the Prospectus and assume no responsibility for
its contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion on
the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of
such questions of law and statutes of the State of Delaware as we
have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act, and all filings required under the laws of
the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made.
2. Under the Delaware Business Trust Act and the
Trust Agreement, the Trust has the trust power and authority to
(i) own property and conduct its business, all as described in
the Prospectus, (ii) execute and deliver, and perform its
obligations under, the Underwriting Agreement, and (iii) issue,
and perform its obligations under, the Trust Securities.
3. The Trust Agreement is a legal, valid and binding
agreement of the Company and the Trustees, and is enforceable
against the Company and the Trustees, in accordance with its
terms.
4. Under the Delaware Business Trust Act and the
Trust Agreement, the execution and delivery of the Underwriting
Agreement by the Trust, and the performance by the Trust of its
obligations thereunder, have been duly authorized by all
requisite trust action on the part of the Trust.
5. No authorization, approval, consent or order of
any Delaware court or Delaware governmental authority or Delaware
agency is required to be obtained by the Trust solely in
connection with the issuance and sale of the Preferred Trust
Securities.
6. The Preferred Trust Securities have been duly
authorized by the Trust Agreement and, when issued and sold in
accordance with the Trust Agreement, the Preferred Trust Securities
will be, subject to the qualifications set forth in paragraph 7
below, fully paid and nonassessable undivided beneficial interests
in the assets of the Trust.
7. The Preferred Trust Security Holders, as
beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the
Preferred Trust Security Holders may be obligated, pursuant to
the Trust Agreement, to (i) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising
from transfers or exchanges of Preferred Trust Securities
Certificates and the issuance of replacement Preferred Trust
Securities Certificates, and (ii) provide security or indemnity
in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Trust
Agreement.
8. Under the Delaware Business Trust Act and the
Trust Agreement, the issuance of the Preferred Trust Securities
is not subject to preemptive rights.
9. The issuance and sale by the Trust of the Trust
Securities, the execution, delivery and performance by the Trust
of the Underwriting Agreement, the consummation by the Trust of
the transactions contemplated thereby and the compliance by the
Trust with its obligations thereunder do not violate (i) any of
the provisions of the Certificate or the Trust Agreement, or (ii)
any applicable Delaware law or Delaware administrative
regulation.
10. The Preferred Trust Security Holders (other than
those Preferred Trust Security Holders who reside or are
domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result
of their participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of Delaware.
The opinion expressed in paragraph 3 above is subject,
as to enforcement, to the effect upon the Trust Agreement of
(i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or transfer
and other similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity,
including applicable law relating to fiduciary duties (regardless
of whether considered and applied in a proceeding in equity or at
law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution.
We consent to your relying as to matters of Delaware
law upon this opinion in connection with the Underwriting
Agreement. We also consent to Winthrop, Stimson, Putnam &
Roberts' and Thelen Reid & Priest LLP's relying as to matters of
Delaware law upon this opinion in connection with opinions to be
rendered by them on the date hereof pursuant to the Underwriting
Agreement. Further, we consent to the reliance by The Bank of
New York (in its capacity as Debenture Trustee under the
Subordinated Indenture, as trustee under the Guarantee, and as
Property Trustee under the Trust Agreement) and The Bank of New
York (Delaware) (in its capacity as Delaware Trustee under the
Trust Agreement) as to matters of Delaware law upon this opinion
in connection with the matters set forth herein. Except as
stated above, without our prior written consent, this opinion may
not be furnished or quoted to, or relied upon by, any other
Person for any purpose.
Very truly yours,
Schedule IV
[LETTERHEAD OF WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.]
, 1998
----------
[Names]
as Representatives of Underwriters named in Schedule II
to the Underwriting Agreement, as herein defined
c/o [Name]
[Address]
Ladies and Gentlemen:
We have acted as General Counsel to Texas Utilities
Company (the "Company") in connection with the transactions
contemplated by the Underwriting Agreement dated , 1998
----------
among the Company, TXU Capital I (the "Trust") and you (the
"Underwriting Agreement"), including, among others, (i) the
issuance by the Trust, a statutory business trust organized under
the Delaware Business Trust Act (the "Delaware Act"), of
Preferred Trust Securities (the "Preferred Trust Securities")
having an aggregate liquidation preference amount of
$ , (ii) the issuance by the Company of
--------------
$ principal amount of its Junior Subordinated
---------------
Debentures, Series (the "Debentures") and (iii) the guarantee
--
by the Company of the Preferred Trust Securities pursuant to a
Guarantee Agreement, dated the date hereof, between the Company
and The Bank of New York, as trustee (the "Guarantee").
Terms not otherwise defined herein are used with the
meanings ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the
corporate proceedings in connection with the authorization,
execution and delivery of the Underwriting Agreement, the Trust
Agreement, the Indenture, the Debentures and the Guarantee. We
have also examined such other documents and satisfied ourselves
as to such other matters as we have deemed necessary as a basis
for the conclusions of law contained in the opinions expressed
below. We have relied as to various questions of fact upon the
representations and warranties of the Company contained in the
Underwriting Agreement and, where we deemed appropriate, on
certificates of public officials. We have relied upon a
certificate of the Indenture Trustee as to the authentication of
the Debentures. In our examination we have assumed the
genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as
photostatic or certified copies.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the Company
generally, we are of the opinion that:
1. The Company is a corporation duly authorized,
validly existing and in good standing under the laws of the State
of Texas, and has the corporate power and authority: (a) to
execute, deliver and perform its obligations under the
Underwriting Agreement and the Indenture, (b) to issue the
Debentures and the Guarantee and to incur the indebtedness to be
evidenced thereby and (c) to own its property and assets and to
conduct the business which it is now conducting;
2. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
3. The Indenture, the Trust Agreement and the Guarantee
have been duly qualified under the Trust Indenture Act.
4. The Debentures and the Indenture have been duly
authorized, executed and delivered by the Company, the Debentures
are entitled to the benefits of the Indenture, and the Debentures
and the Indenture are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally and of general
principles of equity.
5. The Guarantee has been duly authorized, executed and
delivered by the Company, and is enforceable against the Company
in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium
and other laws affecting the rights and remedies of creditors
generally and of general principles of equity.
6. The statements made in the Prospectus under the
captions "Description of the Preferred Trust Securities,"
"Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the " and
--------------
"Certain Terms of the Series A Debentures", insofar as such
statements constitute summaries of the legal matters or documents
referred to therein, are accurate in all material respects;
7. Neither the Company nor the Trust is, or after giving
effect to the issuance and sale of the Capital Securities will
be, directly or indirectly controlled by, or acting on behalf of
any person which is, an investment company within the meaning of
the Investment Company Act of 1940, as amended.
8. The Trust is duly qualified to transact business in
the State of Texas as a foreign limited liability company. Under
Texas law, the liability, if any, of holders of Preferred Trust
Securities for the debts, liabilities and obligations of the
Trust for which they are not otherwise liable by statute or
agreement will be governed by the Delaware Act.
9. Other than as stated in the Registration Statement
and the Prospectus, there are no material pending legal
proceedings to which the Company is a party or of which property
of the Company is the subject which depart from the ordinary
routine litigation incident to the kind of business conducted by
the Company, and to our best knowledge no such proceedings are
contemplated;
10. The Registration Statement, and the Prospectus at the
time it was filed with the Commission pursuant to Rule 424 under
the Securities Act (except for financial statements and schedules
and other financial and statistical data contained or
incorporated by reference therein and except for that part of the
Registration Statement that constitutes the Forms T-1, as to
which we do not express any belief) complied as to form in all
material respects with the Securities Act and the applicable
instructions, rules and regulations of the Commission thereunder;
the Incorporated Documents (except as to the financial statements
and schedules and other financial and statistical data contained
therein, as to which we do not express any belief), at the time
they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and
the applicable instructions, rules and regulations of the
Commission thereunder; and the Registration Statement has become
and is effective under the Securities Act and, to our best
knowledge, no proceedings for a stop order with respect thereto
are pending or threatened under Section 8 of the Securities Act.
11. No other approval, authorization, consent or order
of any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Debentures and the issuance
by the Company of the Guarantee.
12. Each Principal Subsidiary (as defined below) of the
Company has been incorporated and is validly existing and
subsisting as a corporation under the laws of the jurisdiction of
its incorporation; each Principal Subsidiary of the Company has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and
as set forth in or contemplated by the Prospectus, and to our
knowledge, is qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, considered as a whole; and except as set forth in
or contemplated by the Registration Statement and the Prospectus,
all of the issued and outstanding capital stock of each Principal
Subsidiary of the Company has been authorized and is non-
assessable and, to our knowledge, all such shares are validly
issued and fully paid and (except for directors' qualifying
shares) are owned by the Company, directly or through is
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity other than those
ordinary shares of TU Finance (No. 2) Limited, TU Acquisitions
PLC, The Energy Group Limited and Energy Holdings (No. 3) Limited
acquired indirectly by the Company, which have been pledged as
collateral for borrowings made by subsidiaries. For purposes of
this opinion, the term "Principal Subsidiary" shall mean,
collectively, the following companies: Eastern Energy Limited,
Texas Utilities Australia Pty. Ltd., The Energy Group Limited,
Eastern Group plc, Eastern Electricity plc, Eastern Generation
Limited, Eastern Natural Gas Limited, Eastern Power and Energy
Trading Limited, Texas Energy Industries, Inc., ENSERCH
Corporation, Lufkin-Conroe Communications Co., Southwestern
Electric Service Company, Texas Utilities Electric Company, Texas
Utilities Fuel Company, Texas Utilities Mining Company and Texas
Utilities Services Inc.
In the course of the preparation of the information
relating to the Company contained in the Prospectus (including
the documents incorporated therein by reference) we had
discussions with certain of its officers and representatives and
certain officers and representatives of certain of its
subsidiaries, with other counsel for the Company, with Deloitte &
Touche LLP, the independent certified public accountants who
audited certain of the financial statements of the Company
incorporated by reference in the Registration Statement and the
Prospectus, and with Ernst & Young, the independent certified
public accountants who audited certain of the financial
statements of Energy Holdings (No. 3) Limited (formerly known as
The Energy Group PLC) incorporated by reference in the
Registration Statement and the Prospectus, but we made no
independent verification of the accuracy or completeness of the
representations and statements made to us by the Company or the
information included by the Company in the Prospectus and take no
responsibility therefor except as set forth in paragraph 6 above.
However, our examination of the information relating to the
Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us anything
which gives us reason to believe that (except for financial
statements and schedules and financial and statistical data and
except for that part of the Registration Statement that
constitutes the Forms T-1, as to which we do not express any
belief) (i) the Registration Statement, as of the Effective Date,
included an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading or (ii) the
Prospectus at the time it was filed with the Commission pursuant
to Rule 424, included, or on the date hereof includes an untrue
statement of a material fact or on such dates omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
We are members of the State Bar of Texas and do not hold
ourselves out as experts in the laws of the State of New York.
As to all matters of New York law, we have, with your consent,
relied upon the opinion of Thelen Reid & Priest LLP, New York,
New York, of Counsel to the Company; as to matters of the law of
the United Kingdom, we have, with your consent relied upon the
opinions of M.C. Murray, London, England, General Counsel and
Secretary of The Energy Group Limited and E.J. Lean, Group
Solicitor of Eastern Group plc, and as to all matters of law of
the Commonwealth of Australia we have with your consent relied
upon the opinion of Baker & McKenzie, Sidney, Commonwealth of
Australia, Counsel to Texas Utilities Australia Pty. Ltd.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By:
----------------------------
A Partner
Schedule V
[LETTERHEAD OF THELEN REID & PRIEST LLP]
New York, New York
, 1998
----------
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement, as herein defined
c/o [Name]
[Address]
Ladies and Gentlemen:
We have acted as counsel to Texas Utilities Company (the
"Company") in connection with the transactions contemplated by
the Underwriting Agreement dated , 1998 among the
----------
Company, TXU Capital I (the "Trust") and you (the "Underwriting
Agreement"), including, among others, (i) the issuance by the
Trust, a statutory business trust organized under the Delaware
Business Trust Act (the "Delaware Act") of Preferred Trust
Securities (the "Preferred Trust Securities") having an aggregate
liquidation preference amount of $ , (ii) the
---------------
issuance by the Company of $ principal amount of
---------------
its Subordinated Junior Debentures, Series (the "Debentures")
--
and (iii) the guarantee by the Company of the Preferred Trust
Securities pursuant to a Guarantee Agreement, dated the date
hereof, between the Company and The Bank of New York, as trustee
(the "Guarantee").
Terms not otherwise defined herein are used with the
meanings ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the
corporate proceedings in connection with the authorization,
execution and delivery of the Underwriting Agreement, the Trust
Agreement, the Indenture, the Debentures and the Guarantee. We
have also examined such other documents and satisfied ourselves
as to such other matters as we have deemed necessary as a basis
for the conclusions of law contained in the opinions expressed
below. We have relied as to various questions of fact upon the
representations and warranties of the Company contained in the
Underwriting Agreement and, where we deemed appropriate, on
certificates of public officials. We have relied upon a
certificate of the Indenture Trustee as to the authentication of
the Debentures. In our examination we have assumed the
genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as
photostatic or certified copies.
Upon the basis of our familiarity with these transactions
and with the affairs and properties of the Company generally, we
are of the opinion that:
1. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
2. The Indenture, the Trust Agreement and the Guarantee
have been duly qualified under the Trust Indenture Act;
3. The Debentures and the Indenture have been duly
authorized, executed and delivered by the Company, the Debentures
are entitled to the benefits of the Indenture, and the Debentures
and the Indenture are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally and of general
principles of equity;
4. The Guarantee has been duly authorized, executed and
delivered by the Company, and is enforceable against the Company
in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium
and other laws affecting the rights and remedies of creditors
generally and of general principles of equity;
5. The statements made in the Prospectus under the
captions "Description of the Preferred Trust Securities,"
"Description of the Junior Subordinated Debentures,"
"Description of the Guarantee", "Certain Terms of the
" and "Certain Terms of the Series A Debentures"
----------------
insofar as such statements constitute summaries of the legal
matters or documents referred to therein, are accurate in all
material respects;
6. Neither the Company nor the Trust is, or after giving
effect to the issuance and sale of the Preferred Trust Securities
will be, directly or indirectly controlled by, or acting on
behalf of any person which is, an investment company within the
meaning of the Investment Company Act of 1940, as amended;
7. The Registration Statement, as amended, as of the
Effective Date, and the Prospectus at the time it was filed with
the Commission pursuant to Rule 424 (except for the financial
statements and schedules and other financial and statistical data
contained or incorporated by reference therein and except for
that part of the Registration Statement that constitutes the
Forms T-1, as to which we do not express any belief) complied as
to form in all material respects with the Securities Act and the
applicable instructions, rules and regulations of the Commission
thereunder; the Incorporated Documents (except as to the
financial statements and schedules and other financial and
statistical data contained therein, as to which we do not express
any belief), at the time they were filed with the Commission,
complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; and the
Registration Statement has become and is effective under the
Securities Act and, to our best knowledge, no proceedings for a
stop order with respect thereto are pending or threatened under
Section 8 of the Securities Act; and
8. No other approval, authorization, consent or order of
any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Debentures and the issuance
by the Company of the Guarantee.
We herewith confirm as our opinion the statements under
the caption "Certain United States Federal Income Tax
Consequences Relating to the Preferred Trust Securities" in the
Prospectus.
In the course of the preparation of the information
relating to the Company contained in the Prospectus (including
the documents incorporated therein by reference) we had
discussions with certain of its officers and representatives, and
certain officers and representatives of certain of its
subsidiaries, with other counsel for the Company, with Deloitte &
Touche LLP, the independent certified public accountants who
audited certain of the financial statements of the Company
incorporated by reference in the Registration Statement and the
Prospectus, with Ernst & Young, the independent certified public
accountants who audited certain of the financial statements of
Energy Holdings (No. 3) Limited (formerly known as The Energy
Group PLC) incorporated by reference in the Registration
Statement and the Prospectus, and with certain of your officers
and employees and your counsel, but we made no independent
verification of the accuracy or completeness of the
representations and statements made to us by the Company or the
information included by the Company in the Prospectus and take no
responsibility therefor except as set forth in the immediately
preceding paragraph and in paragraph 5 above. However, our
examination of the information relating to the Company contained
in the Registration Statement and the Prospectus and our
discussions did not disclose to us anything which gives us reason
to believe that (except for financial statements and schedules
and financial and statistical data and except for that part of
the Registration Statement that constitutes the Forms T-1, as to
which we do not express any belief) (i) the Registration
Statement, as of the Effective Date, included an untrue statement
of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein
not misleading or (ii) the Prospectus at the time it was filed
with the Commission pursuant to Rule 424, included or on the date
hereof includes an untrue statement of a material fact or on such
dates omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
We are members of the New York Bar and do not hold
ourselves out as experts in the laws of the State of Texas. As
to all matters of Texas law, we have, with your consent, relied
upon the opinion of Worsham, Forsythe & Wooldridge, L.L.P.,
Dallas, Texas, General Counsel for the Company. We believe that
you and we are justified in relying on such opinion.
Very truly yours,
THELEN REID & PRIEST LLP
SCHEDULE VI
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
, 1998
----------
[Names]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement as defined herein
c/o [Names]
[Address]
Ladies and Gentlemen:
We have acted as counsel to you and the several
Underwriters in connection with the transactions contemplated by
the Underwriting Agreement dated , 1998 between Texas
----------
Utilities Company (the "Company"), TXU Capital I (the "Trust")
and you (the "Underwriting Agreement") in which (i) the Trust, a
statutory business trust organized under the Delaware Business
Trust Act, proposes to issue $ aggregate
---------------
liquidation preference amount of its Preferred Trust Securities
(the "Preferred Trust Securities"), (ii) the Company proposes to
issue $ principal amount of its Floating Rate
---------------
Junior Subordinated Debentures, Series , (the "Debentures") and
--
(iii) the Company proposes to guarantee the Preferred Trust
Securities to the extent described in the Prospectus. Terms not
otherwise defined herein are used with the meanings ascribed to
them in the Underwriting Agreement.
We are members of the New York Bar and do not hold
ourselves out as experts in the laws of the State of Texas. We
have, with your consent, relied upon an opinion of even date
herewith addressed to you by Worsham, Forsythe & Wooldridge,
L.L.P., Dallas, Texas, General Counsel for the Company, as to the
matters covered in such opinion relating to Texas law. We have
reviewed such opinion and believe that it is satisfactory and
that you and we are justified in relying thereon. We understand
that you are relying, for all matters of Delaware law, upon an
opinion of even date herewith addressed to you by Richards,
Layton & Finger, P.A., Delaware Counsel for the Company.
We have, in addition, examined the documents described in
the list of closing papers as having been delivered to you at the
closing and such other documents and satisfied ourselves as to
such other matters as we have deemed necessary in order to enable
us to express this opinion. As to various questions of fact
material to this opinion, we have relied upon representations of
the Company and statements in the Registration Statement
hereinafter mentioned. In such examination we have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us and the genuineness and conformity to original
documents of documents submitted to us as certified or
photostatic copies.
Based upon the foregoing, we are of the opinion that:
1. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
2. The Indenture has been duly qualified under the Trust
Indenture Act.
3. The Debentures and the Indenture have been duly
authorized, executed and delivered by the Company, the Debentures
are entitled to the benefits of the Indenture, and the Debentures
and the Indenture are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, receivership, moratorium
and other laws affecting the rights and remedies of creditors
generally and of general principles of equity.
4. The Guarantee has been duly authorized, executed and
delivered by the Company, and is enforceable against the Company
in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, fraudulent conveyance,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of
equity.
5. The statements made in the Prospectus under the
captions "Description of the Preferred Trust Securities,"
"Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the ", and
-----------------
"Certain Terms of the Series A Debentures", insofar as such
statements constitute summaries of the legal matters or documents
referred to therein, are accurate in all material respects.
6. Neither the Company nor the Trust is, or after giving
effect to the issuance and sale of the Preferred Trust
Securities, will be, and neither the Company nor the Trust is
directly or indirectly controlled by, or acting on behalf of any
person which is, an investment company within the meaning of the
Investment Company Act of 1940.
7. No other approval, authorization, consent or order of
any public board or body (other than in connection or in
compliance with the provisions of the blue-sky laws of any
jurisdiction) is legally required for the authorization of the
issue and sale by the Company of the Debentures and the issuance
by the Company of the Guarantee as contemplated in the
Underwriting Agreement.
8. The Registration Statement, as amended, at the
Effective Date, and the Prospectus at the time it was filed with
the Commission pursuant to Rule 424 (except in each case as to
financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein
and except for that part of the Registration Statement that
constitutes the Forms T-1, as to which we do not express any
opinion), complied as to form in all material respects with the
Securities Act and the applicable instructions, rules and
regulations of the Commission thereunder.
In passing upon the form of the Registration Statement
and the form of the Prospectus, we necessarily assume the
correctness and completeness of the statements made by the
Company and the information included in the Registration
Statement and the Prospectus and take no responsibility therefor,
except insofar as such statements relate to us and as set forth
in paragraph 5 above. In the course of the preparation by the
Company of the Registration Statement and the Prospectus, we have
had discussions with certain of its officers and representatives,
and representatives of certain of its subsidiaries, with counsel
for the Company, with Deloitte & Touche LLP, the independent
public accountants who audited certain of the financial
statements of the Company incorporated by reference in the
Registration Statement and the Prospectus, with Ernst & Young,
the independent public accountants who audited certain of the
financial statements of Energy holdings (No. 3) Limited (formerly
known as The Energy Group PLC) incorporated by reference in the
Registration Statement and the Prospectus, and with certain of
your representatives. Our examination of the Registration
Statement and the Prospectus and our discussions did not disclose
to us any information which gives us reason to believe that at
the Effective Date the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the time it was
filed with the Commission pursuant to Rule 424, or at the date
hereof, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. We do
not express any belief as to the financial statements or other
financial or statistical data contained or incorporated by
reference in the Registration Statement or Prospectus or as to
that part of the Registration Statement that constitutes the
Forms T-1.
This opinion is given to you solely for the use of the
several Underwriters in connection with the Underwriting
Agreement and the transactions contemplated thereunder and may
not be relied upon by any other person or for any other purpose.
Very truly yours,