As filed with the Securities and Exchange Commission on April 3, 1998.
Registration No.
========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------
TEXAS UTILITIES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 75-2669310
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT A. PETER B. TINKHAM ROBERT J. REGER,
WOOLDRIDGE, Esq. Texas Utilities JR., Esq.
Worsham, Forsythe Company Reid & Priest LLP
& Wooldridge, L.L.P. Secretary and 40 West 57th
1601 Bryan Street Assistant Treasurer Street
Dallas, Texas 75201 1601 Bryan Street New York, New York
(214) 979-3000 Dallas, Texas 75201 10019
(214) 812-4600 (212) 603-2000
(NAMES AND ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS,
INCLUDING AREA CODES, OF AGENTS FOR SERVICE)
-------------------
It is respectfully requested that the Commission send copies of
all notices, orders and communications to:
STEPHEN K. WAITE, Esq.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
Approximate date of commencement of proposed sale of
the securities to the public:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES
EFFECTIVE.
-------------------
CALCULATION OF REGISTRATION FEE
========================================================================
TITLE PROPOSED
OF EACH MAXIMUM PROPOSED
CLASS OF OFFERING MAXIMUM
SECURITIES PRICE AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT(1) PRICE(1) FEE(1)
------------------------------------------------------------------------
6.375% SERIES C
EXCHANGE SENIOR
NOTES DUE 2008 $200,000,000 100% $200,000,000 $59,000
========================================================================
(1) The filing fee has been calculated pursuant to Rule 457(f)
promulgated under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT 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, AS AMENDED, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
========================================================================
<PAGE>
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
Subject to Completion, dated April 3, 1998
TEXAS UTILITIES COMPANY
OFFER TO EXCHANGE ANY OR ALL OF ITS
6.375% SERIES C SENIOR NOTES DUE 2008
FOR
6.375% SERIES C EXCHANGE SENIOR NOTES DUE 2008
Texas Utilities Company, a Texas corporation (Company), hereby
offers upon the terms and subject to the conditions set forth in
this Prospectus and the accompanying Letter of Transmittal
(Letter of Transmittal) to exchange (Exchange Offer) any and all
of its outstanding 6.375% Series C Senior Notes due 2008 (Old
Notes) for an equal principal amount of its 6.375% Series C
Exchange Senior Notes due 2008 (New Notes). The New Notes and
the Old Notes are sometimes referred to herein collectively as
the Notes or the Senior Notes. The forms and terms of the New
Notes will be the same as the forms and terms of the related Old
Notes except that the New Notes will be registered under the
Securities Act of 1933, as amended (Securities Act), and hence
(except for any legend required by The Depository Trust Company),
will not bear legends restricting the transfer thereof. The New
Notes will be entitled to the benefits of the indenture governing
the Old Notes.
The New Notes will be unsecured obligations of the Company.
Interest on the New Notes will be payable semi-annually on
January 1 and July 1 of each year. The New Notes of each series
will not be redeemable prior to Maturity. See DESCRIPTION OF THE
NEW NOTES.
The Company will accept for exchange any and all Old Notes
which are properly tendered to The Bank of New York, as Exchange
Agent, in the Exchange Offer prior to 5:00 p.m., New York City
time, on , 1998 (if and as extended, the Expiration Date).
------
Tenders of Old Notes may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date. The Exchange
Offer is not conditioned upon any minimum principal amount of Old
Notes being tendered for exchange. Old Notes may be tendered
only in denominations of $5,000 and integral multiples of $1,000
in excess thereof.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME ON , 1998, UNLESS THE
EXCHANGE OFFER IS EXTENDED.
Based on existing interpretations of the Securities Act by the
staff of the Commission's Division of Corporation Finance (Staff)
set forth in several no-action letters to third parties, and
subject to the immediately following sentence, the Company
believes that the New Notes issued pursuant to the Exchange Offer
may be offered for resale, resold and otherwise transferred by
the Holders thereof (other than Holders who are broker-dealers)
without further compliance with the registration and prospectus
delivery provisions of the Securities Act. However, any purchaser
of Old Notes (i) who is an affiliate of the Company or (ii) who
intends to participate in the Exchange Offer for the purpose of
distributing New Notes, or any broker-dealer who purchased Old
Notes to resell pursuant to Rule 144A or any other available
exemption under the Securities Act (i) will not be able to rely
on the interpretation of the Staff set forth in the above-
mentioned no-action letters, (ii) will not be entitled to
tender its Old Notes in the Exchange Offer and (iii) must
comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or transfer
of the Old Notes unless such sale or transfer is made pursuant
to any exemption from such requirements. The Company does not
intend to seek its own no-action letter, and there can be no
assurance that the Staff would make a similar determination
with respect to the New Notes as it has in such no-action letters
to other parties. See "THE EXCHANGE OFFER."
The Company believes that none of the Holders of the Old Notes
is an affiliate (as such term is defined in Rule 405 under the
Securities Act) of the Company.
(cover continued on following page)
<PAGE>
The Company will not receive any proceeds from the Exchange
Offer. The Company has agreed to bear the expenses of the
Exchange Offer. No underwriter is being used in connection with
the Exchange Offer.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY 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 , 1998.
<PAGE>
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . 3
DOCUMENTS INCORPORATED BY REFERENCE . . . . . . . . . . . . . 3
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . 5
SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . . . 9
THE COMPANY AND ITS SUBSIDIARIES . . . . . . . . . . . . . . 10
THE EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . 10
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . 18
DESCRIPTION OF THE NEW NOTES . . . . . . . . . . . . . . . . 18
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES . . . . 31
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . 32
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 34
2
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTA-
TIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICI-
TATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURI-
TIES DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY SUCH SECURITIES IN ANY CIRCUM-
STANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
AVAILABLE INFORMATION
On August 5, 1997, the Company became a holding company which
owns all of the outstanding common stock of Texas Energy
Industries, Inc. (formerly Texas Utilities Company) (TEI)
(Commission File No. 1-3591) and ENSERCH Corporation (ENSERCH)
(Commission File No. 1-3183). The Company is, and TEI and
ENSERCH have been, subject to the informational requirements of
the Securities and Exchange Act of 1934, as amended (Exchange
Act), and in accordance therewith the Company files, and its
predecessors have filed, reports, proxy statements and other
information with the Commission. Such reports, proxy statements
and other information filed by the Company and its predecessors
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 following Regional
Offices of the Commission: Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and New York
Regional Office, 7 World Trade Center, Suite 1300, 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., Washington, D.C. 20549 at prescribed rates. In
addition, the Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports and other information
filed by the Company, TEI and ENSERCH. The Common Stock of the
Company is listed on the New York, Chicago and Pacific stock
exchanges, where reports, proxy statements and other information
concerning the Company and TEI may be inspected. Reports, proxy
statements and other information concerning ENSERCH may be
inspected at the New York and Chicago stock exchanges.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, previously filed with the Commission
(Commission File No. 1-12833), pursuant to the Exchange Act, are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year
ended December 31, 1997 (1997 10-K).
2. The Company's Current Reports on Form 8-K dated February
26 and March 13, 1998.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering hereunder
shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of
such documents; provided, however, that the documents enumerated
above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing
with the Commission of the Company's most recent Annual Report on
Form 10-K shall not be incorporated by reference in this
Prospectus or be a part hereof from and after the filing of such
Annual Report on Form 10-K. The documents which are incorporated
by reference in this Prospectus are sometimes hereinafter
referred to as the "Incorporated Documents."
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which is deemed to be
3
<PAGE>
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 COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO
EACH PERSON, INCLUDING ANY BENEFICIAL OWNER OF NEW NOTES, TO WHOM
A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR
ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE
INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS
(UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS) AND THE INDENTURE AND OFFICER'S CERTIFICATE,
EACH AS DESCRIBED HEREIN. REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO: SECRETARY, TEXAS UTILITIES COMPANY, ENERGY PLAZA,
1601 BRYAN STREET, DALLAS, TEXAS 75201; TELEPHONE NUMBER (214)
812-4600.
4
<PAGE>
SUMMARY INFORMATION
The following summary information is qualified in its
entirety by the information contained elsewhere in this
Prospectus and in the Incorporated Documents.
THE COMPANY
The Company is a holding company which owns all of the
outstanding common stock of TEI and ENSERCH. TEI is a holding
company whose largest subsidiary is Texas Utilities Electric
Company (TU Electric). TU Electric is an electric utility
engaged in the generation, purchase, transmission, distribution
and sale of electric energy in the north central, eastern and
western parts of Texas. ENSERCH is an integrated company focused
on natural gas. ENSERCH operates primarily in the north central
and eastern parts of Texas. Its major business segments are
natural gas pipeline, processing, marketing and distribution. In
November 1997, the Company acquired Lufkin-Conroe Communications
Co. (LCC), a privately held, independent local exchange telephone
company, which subsequently became a subsidiary of TEI. In
addition, a subsidiary of the Company has made a tender offer for
all of the outstanding shares of The Energy Group PLC (TEG), a
diversified international energy group, and currently holds
21.96% of such shares. See THE COMPANY AND ITS SUBSIDIARIES.
THE PRIVATE OFFERING
OLD NOTES . . . . The Company issued and sold $200,000,000
principal amount of its 6.375% Series C
Senior Notes due 2008 to Salomon Brothers
Inc, Goldman, Sachs & Co. and Lehman
Brothers Inc. (Initial Purchasers) in a
transaction exempt from the registration
requirements of the Securities Act
(Private Offering). The Initial
Purchasers sold the Old Notes to certain
qualified institutional buyers pursuant
to Rule 144A under the Securities Act.
USE OF PROCEEDS . The Company received approximately
$198,000,000 in net proceeds from the
Private Offering, after deducting
discounts to the Initial Purchasers and
expenses of the Private Offering. The
Company used the net proceeds for
investment in the common stocks of
subsidiaries and for other corporate
purposes. The Company will not receive
any proceeds from the Exchange Offer.
THE EXCHANGE OFFER
THE NOTE EXCHANGE
The Company is offering to exchange New
OFFER . . . . . . Notes in principal amounts of $5,000 and
integral multiples of $1,000 in excess
thereof for equal principal amounts of
Old Notes that are properly tendered and
accepted. The Company will issue the New
Notes on or promptly after the Expiration
Date. There is $200,000,000 aggregate
principal amount of Old Notes
outstanding. See THE EXCHANGE OFFER.
5
<PAGE>
RESALE OF NEW Based on existing interpretations of the
NOTES . . . . . . Securities Act by the staff of the
Commission's Division of Corporation
Finance (Staff) set forth in several no-
action letters to third parties, and
subject to the immediately following
sentence, the Company believes that the
New Notes issued pursuant to the Exchange
Offer may be offered for resale, resold
and otherwise transferred by the Holders
thereof (other than Holders who are
broker-dealers) without further
compliance with the registration and
prospectus delivery provisions of the
Securities Act. However, any purchaser
of Old Notes (i) who is an affiliate of
the Company or (ii) who intends to
participate in the Exchange Offer for the
purpose of distributing New Notes, or any
broker-dealer who purchased Old Notes to
resell pursuant to Rule 144A or any other
available exemption under the Securities
Act (i) will not be able to rely on the
interpretation of the Staff set forth in
the above-mentioned no-action letters,
(ii) will not be entitled to tender its
Old Notes in the Exchange Offer and (iii)
must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any
sale or transfer of the Old Notes unless
such sale or transfer is made pursuant to
any exemption from such requirements.
The Company does not intend to seek its
own no-action letter, and there can be no
assurance that the Staff would make a
similar determination with respect to the
New Notes as it has in such no-action
letters to other parties.
Each Holder of Old Notes (other than
certain specified Holders) that wishes to
exchange Old Notes for New Notes in the
Exchange Offer will be required to
represent that (i) it is not an affiliate
of the Company, (ii) the New Notes to be
received by it were acquired in the
ordinary course of its business and (iii)
at the time of the Exchange Offer, it has
no arrangement with any person to
participate in the distribution (within
the meaning of the Securities Act) of the
New Notes. In addition, in connection with
any resales of New Notes, any broker-dealer
(Participating Broker-Dealer) that acquired
Old Notes for its own account as a result
of market-making or other trading activities
must deliver a prospectus meeting the
requirements of the Securities Act. The
Staff has taken the position that Participating
Broker-Dealers may fulfill their prospectus
delivery requirements with respect to New
Notes (other than resale of an unsold
allotment from the original sale of Old Notes)
with the prospectus contained in the Exchange
Offer Registration Statement. Under the
Registration Rights Agreement, the Company is
required to allow Participating Broker-Dealers
and other persons, if any, subject to similar
prospectus delivery requirements to use the
prospectus contained in the Exchange Offer
Registration Statement in connection with the
resale of such New Notes.
EXPIRATION DATE . The Exchange Offer will expire at 5:00
p.m., New York City time, on , 1998
-----
unless extended, in which case the term
"Expiration Date" shall mean the latest
date and time to which the Exchange Offer
is extended. The Company will accept for
exchange any and all Old Notes which are
properly tendered in the Exchange Offer
prior to 5:00 p.m., New York City time,
on the Expiration Date. The New Notes
issued pursuant to the Exchange Offer
will be delivered on or promptly after
the Expiration Date.
PROCEDURES FOR
TENDERING OLD Each Holder of Old Notes wishing to
NOTES . . . . . . participate in the Exchange Offer must
complete, sign and date the Letter of
Transmittal, or a facsimile thereof, in
accordance with the instructions
contained herein and therein, and mail or
otherwise deliver such Letter of
Transmittal, or such facsimile, together
with such Old Notes (if held in
certificated form) and any other required
documentation to The Bank of New York, as
exchange agent for the Notes (the
Exchange Agent). By executing the Letter
of Transmittal, each Holder will
represent to the Company that, among
other things, the New Notes acquired
pursuant to the Exchange Offer are being
obtained in the ordinary course of
business of the person receiving such New
Notes, that such person will not and has
no arrangement or understanding with any
person to participate in the distribution
of such New Notes, and that neither the
Holder nor any such other person is an
"affiliate," as defined in Rule 405 under
the Securities Act, of the Company.
SPECIAL
PROCEDURES FOR Any beneficial owner whose interests in
BENEFICIAL OWNERS the Old Notes are registered in the name
of a broker, dealer, commercial bank,
trust company, nominee, or other
securities intermediary and who wishes to
tender such Old Notes in the Exchange
Offer should contact such securities
intermediary promptly and instruct such
securities intermediary to tender on such
beneficial owner's behalf. If a
beneficial owner whose Old Notes are in
certificated form wishes to tender on
such owner's own behalf, such owner must,
prior to completing and executing the
Letter of Transmittal and delivering its
Old Notes, either make appropriate
arrangements to register ownership of the
Old Notes in such owner's name or obtain
a properly completed assignment from the
registered Holder. The transfer of
registered ownership may take
considerable time and might not be
completed prior to the Expiration Date.
GUARANTEED
DELIVERY Holders of Old Notes who wish to tender
PROCEDURES . . . their Old Notes and whose Old Notes are
not immediately available or who cannot
deliver their Old Notes or the Letter of
Transmittal to the Exchange Agent prior
to the Expiration Date, must tender their
Old Notes according to the guaranteed
delivery procedures set forth in THE
EXCHANGE OFFER --"Procedures for Tendering."
WITHDRAWAL RIGHTS Tenders of Old Notes may be withdrawn at
any time prior to 5:00 p.m., New York
City time, on the Expiration Date.
EXCHANGE AGENT . The Bank of New York is the Exchange
Agent. Its telephone number is (212)
. The address of the
--------
Exchange Agent is set forth in THE
EXCHANGE OFFER--"Exchange Agent."
THE NEW NOTES
NEW NOTES . . . . $200,000,000 principal amount of the
Company's 6.375% Series C Exchange Senior
Notes due 2008.
MATURITY . . . . The New Notes will mature on January 1,
2008.
INTEREST ACCRUAL Interest on the New Notes will accrue
from the last date on which semi-annual
interest was paid on the Old Notes or, if
no interest has been paid on the Old
Notes, from January 13, 1998.
INTEREST PAYMENT January 1 and July 1 of each year
DATES . . . . . . (Interest Payment Dates).
REDEMPTION . . . The New Notes may not be redeemed prior
to Maturity.
7
<PAGE>
RANKING . . . . . The New Notes will be unsecured
obligations of the Company and, so long
as they are unsecured, will rank pari
passu with all senior unsecured
indebtedness of the Company. The
Indenture (as defined herein) does not
limit the amount of debt the Company or
any of its subsidiaries may incur.
Because the Company is a holding company
that derives substantially all of its
income from its operating subsidiaries,
the New Notes will be effectively
subordinated to debt and preferred stock
at the subsidiary level. See DESCRIPTION
OF THE NEW NOTES -- "General."
FORM AND
DENOMINATION . . The New Notes will be issued in fully
registered form only in denominations of
$5,000 and in integral multiples of
$1,000 in excess thereof.
DTC ELIGIBILITY . The New Notes will be represented by a
Global Certificate deposited with, or on
behalf of, The Depository Trust Company
(DTC) or its nominee. See DESCRIPTION OF
THE NEW NOTES -- "Book-Entry."
SAME DAY It is expected that beneficial interests
SETTLEMENT . . . in the New Notes will trade in DTC's
Same-Day Funds Settlement System until
maturity. Therefore, secondary market
trading activity in such interests will
be settled in immediately available
funds.
LIMITATION ON The Company may not grant a lien on the
LIENS . . . . . . capital stock of any of its subsidiaries
to secure indebtedness of the Company
without similarly securing the New Notes,
with certain exceptions. See DESCRIPTION
OF THE NEW NOTES -- "Limitation on
Liens."
ASSIGNMENT OF The Company may assign all its
OBLIGATIONS . . . obligations with respect to the New Notes
to a wholly-owned subsidiary which
assumes such obligations. At the time of
any such assignment, the Company will
fully and unconditionally guarantee the
payment as and when due of the principal
of, premium, if any, and interest on,
such New Notes. See DESCRIPTION OF THE
NEW NOTES -- "Assignment of Obligations."
EFFECT OF NOT Any Old Note not tendered in the Exchange
TENDERING . . Offer will remain outstanding and
continue to accrue interest, but will not
retain any rights under the Registration
Rights Agreement (except in the case of
the Initial Purchasers and Participating
Broker-Dealers as provided therein).
TRUSTEE,
REGISTRAR AND
PAYING AGENT . . The Bank of New York
8
<PAGE>
SUMMARY FINANCIAL INFORMATION
(THOUSANDS OF DOLLARS, EXCEPT RATIOS AND PERCENTAGES)
The following material, which is presented herein solely to
furnish limited introductory information, is qualified in its
entirety by, and should be considered in conjunction with, the
other information appearing in this Prospectus, including the
Incorporated Documents. For financial reporting purposes, the
Company is treated, as the successor to TEI. References to the
Company that relate to periods prior to August 5, 1997, shall be
deemed to be references to TEI. Since the acquisitions of
ENSERCH, LCC and Eastern Energy Ltd., an Australian subsidiary
acquired in 1995, were purchase business combinations, no
financial information for those companies is included for periods
prior to their dates of acquisition.
TWELVE MONTHS ENDED
-------------------------------------------------------
DECEMBER 31,
-------------------------------------------------------
1993 1994 1995 1996 1997
------- ------- ------- ------- -------
Income statement data:
Operating
Revenues . . . $5,434,512 $5,663,543 $5,638,688 $6,550,928 $7,945,608
Net Income
(Loss) (a) . . $ 368,660 $ 542,799 $ (138,645) $ 753,606 $ 660,454
Ratio of
Earnings
to Fixed
Charges (a) . 1.89 2.29 0.84 2.39 2.25
ADJUSTED(B)
----------------------------
OUTSTANDING AT
DECEMBER 31,
1997 AMOUNT PERCENT
-------------- ------------ -----------
Capitalization:
Long-term Debt,
less amounts
due currently . . . $ 8,759,379 $ 9,118,629 53.6%
Preferred Stock:
Not subject to
mandatory
redemption . . . . 304,194 190,056
Subject to mandatory
redemption . . . . 20,600 20,600
----------- -----------
Total Preferred
Stock . . . . . 324,794 210,656 1.2
TU Electric Obligated
Mandatorily Redeemable
Preferred Securities
of Trusts Holding
Solely Debentures of
TU Electric (c) . . 875,146 827,772 4.9
Common Stock Equity . 6,843,062 6,843,062 40.3
----------- ----------- ------
Total Capitalization $16,802,381 $17,000,119 100.0%
=========== =========== ======
(a) The twelve-month period ended December 31, 1993 was
affected by the recording of regulatory disallowances in TU
Electric's Docket 11735. The twelve-month period ended
December 31, 1995 was affected by the impairment of several
nonperforming assets, including TU Electric's partially
completed Twin Oak and Forest Grove lignite-fueled
facilities and the New Mexico coal reserves of a
subsidiary, as well as several minor assets. Such
impairment, on an after-tax basis, amounted to $802
million. The twelve months ended December 31, 1997 include
a one time base revenue refund of $80 million as a result
of a settlement with the Public Utility Commission of Texas
(PUC) and a fuel disallowance charge of $80 million as a
result of a fuel reconciliation proceeding before the PUC.
(See the 1997 10-K.)
(b) To give effect to (1) the issuance by the Company in
January 1998 of the Old Notes, (2) the issuance by ENSERCH
in January 1998 of $250,000,000 aggregate principal amount
of its 6-1/4% Series A Notes and Remarketed Reset Notes,
(3) the redemption by TU Electric in January 1998 of
$14,138,000 liquidation amount of its $8.20 cumulative
preferred stock, (4) the redemption by TU Electric Capital
II in January 1998 of $47,374,000 liquidation amount of its
9.00% preferred trust securities and (5) the redemption by
ENSERCH in January 1998 of $100,000,000 liquidation value
of its Series E Preferred Stock and in March 1998 of
$90,750,000 aggregate principal amount of its 6-3/8%
convertible subordinated debentures. Adjusted amounts do
not reflect any possible future (i) sales from time to time
by the Company of up to approximately 14,154,372 shares of
its common stock pursuant to the Company's Direct Stock
Purchase and Dividend Reimbursement Plan and certain
employe benefit plans and exchange by the Company of up to
41,368,470 shares of its common stock for shares of TEG in
connection with the Company's offer to purchase TEG shares,
(ii) sales by TU Electric of up to an additional
$498,850,000 principal amount of its Senior Debt and
$25,000,000 of its cumulative preferred stock and (iii)
sales by ENSERCH and ENSERCH Capital I of up to
$250,000,000 aggregate principal amount of securities, for
each of which registration statements are effective
pursuant to Rule 415 under the Securities Act.
(c) The sole assets of such trusts consist of junior
subordinated debentures of TU Electric in principal
amounts, and having other payment terms, corresponding to
the securities issued by such trusts.
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THE COMPANY AND ITS SUBSIDIARIES
The Company is a Texas corporation organized in 1996 for the
purpose of becoming the holding company for TEI, formerly Texas
Utilities Company, and ENSERCH upon the mergers of TEI and
ENSERCH with wholly owned subsidiaries of the Company (Mergers).
TEI, a Texas corporation, is a holding company whose principal
subsidiary, TU Electric, is an operating public utility company
engaged in the generation, purchase, transmission, distribution
and sale of electric energy in the north central, eastern and
western portions of Texas, an area with a population estimated at
6,020,000. TU Electric's operating revenues and consolidated net
income available for common stock for the twelve months ended
December 31, 1997 were $6,135,417,000 and $745,024,000,
respectively. TU Electric's total capitalization at December 31,
1997 was $12,798,832. Two other subsidiaries of TEI are engaged
directly or indirectly in electric utility operations: (i)
Southwestern Electric Service Company, which is engaged in the
purchase, transmission, distribution and sale of electric energy
in ten counties in the eastern and central parts of Texas, with a
population estimated at 126,900 and (ii) Texas Utilities
Australia Pty. Ltd. (TU Australia), which in 1995 acquired the
common stock of Eastern Energy Limited, a company engaged in the
purchase, distribution, marketing and sale of electric energy to
approximately 489,000 customers in the Melbourne area of
Australia. Neither Southwestern Electric Service Company nor
Eastern Energy Limited generates any electricity. In November
1997, the Company consummated the acquisition of LCC, a privately
held, independent local exchange telephone company, which
subsequently became a subsidiary of TEI. LCC has sixteen
exchanges that serve approximately 100,000 access lines in the
Alto, Conroe and Lufkin areas of southeast Texas and also
provides access services to a number of interexchange carriers
who provide long distance services. TEI also has other wholly
owned subsidiaries which perform specialized functions within the
Texas Utilities Company system.
ENSERCH, a Texas corporation, is an integrated company focused
on natural gas. ENSERCH operates primarily in the north central
and eastern parts of Texas. Its major business operations are
natural gas pipeline, processing, marketing and distribution.
Through these business operations, ENSERCH is engaged in owning
and operating interconnected natural gas transmission lines,
underground storage reservoirs, compressor stations and related
properties in Texas; gathering and processing natural gas to
remove impurities and extract liquid hydrocarbons for sale, and
the wholesale and retail marketing of natural gas in several
areas of the United States, and owning and operating
approximately 550 local gas utility distribution systems in
Texas.
In January 1998, the Company announced that it had approached
TEG, a diversified international energy group, in connection with
its possible interest in acquiring TEG. TEG is the holding
company for Eastern Electricity PLC, which is one of the largest
regional electric companies in the United Kingdom (U.K.), one of
the largest U.K. generators of electricity and one of the largest
U.K. suppliers of natural gas. On March 2, 1998, the Company
announced through its wholly owned subsidiary, TU Acquisitions
PLC (TU Acquisitions), an offer to holders of TEG securities to
acquire 100% of TEG's ordinary shares, including the ordinary
shares evidenced by American Depository Receipts, which was
increased on March 3, 1998, to an offer of L8.40 per share.
Alternatively, up to 20% of the TEG shares may be exchanged for
Company common stock with a value of approximately L8.65 per TEG
share. There is currently a competing offer for TEG shares of
L8.20 per share. The offer by the Company is subject to certain
conditions and to certain regulatory consents and confirmations
which the Company anticipates will be satisfactorily resolved
within the normal timetable for an offer in the U.K. As of April
2, 1998, the Company had acquired 21.96% of TEG's shares in the
U.K. market. The TEG businesses to be acquired by the Company
(which exclude TEG's Peabody Coal and Citizens Power businesses,
which are to be sold by TEG to an unaffiliated party in
connection with the Company's offer) had assets of approximately
$10.3 billion at September 30, 1997 and $5.2 billion of revenues
for the twelve months ended on that date. Such businesses had
debt outstanding at September 30, 1997 of approximately $3.8
billion. The estimated purchase price for the TEG shares is
approximately $7.3 billion. The Company and TU Acquisitions and
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other intermediate U.K. holding companies have entered into
credit facilities with banking institutions in the United States
(U.S.) and the U.K., respectively, which will provide committed
financing sufficient to purchase the outstanding TEG shares and
pay related expenses.
In February 1998, TU Australia agreed to make an offer of
approximately $138 million for all outstanding shares of Allgas
Energy Limited (Allgas), a publicly held gas distribution company
in Queensland, Australia. The offer, which was increased to
approximately $140 million on April 2, 1998, is subject to
acceptance by holders of at least 51% of Allgas outstanding
shares and will be funded by TU Australia's cash flows and bank
lines.
The principal executive offices of the Company are located at
1601 Bryan Street, Dallas, Texas 75201-3411; the telephone number
is (214) 812-4600.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Company issued and sold the Old Notes on January 13, 1998
to the Initial Purchasers in a Private Offering pursuant to a
Purchase Agreement, dated January 8, 1998 (Purchase Agreement).
The Initial Purchasers subsequently sold the Old Notes to
qualified institutional buyers in reliance on Rule 144A under the
Securities Act (QIB's).
Pursuant to the Purchase Agreement, the Company and the
Initial Purchasers entered into a Registration Rights Agreement,
dated January 13, 1998, with respect to the Old Notes
(Registration Rights Agreement). Pursuant to the Registration
Rights Agreement, the Company agreed to use its reasonable best
efforts to consummate the Exchange Offer within 30 days after
this Prospectus is mailed to the Holders. The Registration
Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part, and the description
herein of the terms of the Registration Rights Agreement is
qualified in its entirety by reference thereto. The Registration
Statement of which this Prospectus is a part is intended to
satisfy the Company's obligations with respect to the
registration of the Old Notes in accordance with the terms of the
Registration Rights Agreement.
Based on existing interpretations of the Securities Act by the
staff of the Commission's Division of Corporation Finance (Staff)
set forth in several no-action letters to third parties, and
subject to the immediately following sentence, the Company
believes that the New Notes issued pursuant to the Exchange Offer
may be offered for resale, resold and otherwise transferred by
the Holders thereof (other than Holders who are broker-dealers)
without further compliance with the registration and prospectus
delivery provisions of the Securities Act. However, any
purchaser of Old Notes (i) who is an affiliate of the Company or
(ii) who intends to participate in the Exchange Offer for the
purpose of distributing New Notes, or any broker-dealer who
purchased Old Notes to resell pursuant to Rule 144A or any other
available exemption under the Securities Act (i) will not be able
to rely on the interpretation of the Staff set forth in the
above-mentioned no-action letters, (ii) will not be entitled to
tender its Old Notes in the Exchange Offer and (iii) must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Old
Notes unless such sale or transfer is made pursuant to any
exemption from such requirements. The Company does not intend to
seek its own no-action letter, and there can be no assurance that
the Staff would make a similar determination with respect to the
New Notes as it has in such no-action letters to other parties.
Each Holder of Old Notes (other than certain specified
Holders) that wishes to exchange Old Notes for New Notes in the
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Exchange Offer will be required to represent that (i) it is not
an affiliate of the Company, (ii) the New Notes to be received by
it were acquired in the ordinary course of its business and (iii)
at the time of the Exchange Offer, it has no arrangement with any
person to participate in the distribution (within the meaning of
the Securities Act) of the New Notes. In addition, in connection
with any resales of New Notes, any broker-dealer (Participating
Broker-Dealer) that acquired Old Notes for its own account as a
result of market-making or other trading activities must deliver
a prospectus meeting the requirements of the Securities Act. The
Staff has taken the position that Participating Broker-Dealers
may fulfill their prospectus delivery requirements with respect
to New Notes (other than resale of an unsold allotment from the
original sale of Old Notes) with the prospectus contained in the
Exchange Offer Registration Statement. Under the Registration
Rights Agreement, the Company is required to allow Participating
Broker-Dealers and other persons, if any, subject to similar
prospectus delivery requirements to use the prospectus contained
in the Exchange Offer Registration Statement in connection with
the resale of such New Notes.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, the Company will
accept any and all Old Notes validly tendered and not withdrawn
prior to 5:00 p.m., New York City time, on the Expiration Date.
The Company will issue New Notes in principal amounts equal to
$5,000 and integral multiples of $1,000 in excess thereof in
exchange for equal principal amounts of outstanding Old Notes
surrendered pursuant to the Exchange Offer. Old Notes may be
tendered only in denominations of $5,000 and integral multiples
of $1,000 in excess thereof.
The form and terms of the New Notes will be the same as the
form and terms of the Old Notes except that the New Notes will be
registered under the Securities Act and hence will not bear
legends restricting the transfer thereof. The New Notes will
evidence the same debt as the Old Notes. The New Notes will be
issued under and entitled to the benefits of the Indenture
pursuant to which the Old Notes were issued.
As of the date of this Prospectus, there was outstanding
$200,000,000 aggregate principal amount of Old Notes. This
Prospectus, together with the Letter of Transmittal, is being
sent to all registered Holders of the Old Notes.
The Company intends to conduct the Exchange Offer in
accordance with the provisions of the Registration Rights
Agreement and the applicable requirements of the Exchange Act,
and the rules and regulations of the Commission thereunder. Old
Notes that are not tendered for exchange in the Exchange Offer
will remain outstanding and will be entitled to the rights and
benefits such Holders have under the Indenture.
The Company shall be deemed to have accepted properly tendered
Old Notes when, as and if the Company shall have given oral or
written notice thereof to the exchange agent for the Exchange
Offer (Exchange Agent). The Exchange Agent will act as agent for
the tendering Holders for the purposes of receiving the New Notes
from the Company.
If any tendered Old Notes are not accepted for exchange
because of an invalid tender, the occurrence of certain other
events set forth herein or otherwise, certificates for any such
unaccepted Old Notes will be returned, without expense, to the
tendering registered Holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the
instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange pursuant to the Exchange Offer. The
Company will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the Exchange
Offer. See "Fees and Expenses."
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<PAGE>
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date," shall mean 5:00 p.m., New York
City time on , 1998, unless the Company, in its sole
-------
discretion, extends the Exchange Offer, in which case the term
"Expiration Date" shall mean the latest date and time to which
the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify
the Exchange Agent of any extension by oral or written notice and
will mail to the registered Holders an announcement thereof prior
to 9:00 a.m., New York City time, on the next business day after
the then Expiration Date.
The Company reserves the right, in its sole discretion, (i) to
delay accepting any Old Notes, to extend the Exchange Offer or to
terminate the Exchange Offer if any of the conditions set forth
below under "Conditions" shall not have been satisfied by giving
oral or written notice of such delay, extension or termination to
the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner consistent with the Registration Rights
Agreements. Any such delay in acceptances, extension,
termination or amendment will be followed as promptly as
practicable by oral or written notice thereof to the registered
Holders. If the Exchange Offer is amended in a manner determined
by the Company to constitute a material change, the Company will
promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered Holders,
and the Company will extend the Exchange Offer for a period of
five to ten business days, depending upon the significance of the
amendment and the manner of disclosure to the registered Holders,
if the Exchange Offer would otherwise expire during such five to
ten business day period.
Without limiting the manner in which the Company may choose to
make a public announcement of any delay, extension, amendment or
termination of the Exchange Offer, the Company shall have no
obligation to publish, advertise, or otherwise communicate any
such public announcement, other than by making a timely release
to an appropriate news agency.
Upon satisfaction or waiver of all the conditions to the
Exchange Offer, the Company will accept, promptly after the
Expiration Date, all Old Notes properly tendered and will issue
the New Notes promptly after acceptance of the Old Notes. See
"Conditions." For purposes of the Exchange Offer, the Company
shall be deemed to have accepted properly tendered Old Notes for
exchange when, as and if the Company shall have given oral or
written notice thereof to the Exchange Agent.
In all cases, issuance of the New Notes for Old Notes that are
accepted for exchange pursuant to the Exchange Offer will be made
only after timely receipt by the Exchange Agent of a properly
completed and duly executed Letter of Transmittal and all other
required documents; provided, however, that the Company reserves
the absolute right to waive any defects or irregularities in the
tender or conditions of the Exchange Offer. If any tendered Old
Notes are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer or if Old Notes are submitted
for a greater principal amount than the Holder desires to
exchange, then such unaccepted or non-exchanged Old Notes
evidencing the unaccepted portion, as appropriate, will be
returned without expense to the tendering registered Holder
thereof as promptly as practicable after the expiration or
termination of the Exchange Offer.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the
Company will not be required to exchange any New Notes for any
Old Notes and may terminate the Exchange Offer before the
acceptance of any Old Notes for exchange, if:
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<PAGE>
(i) the Exchange Offer violates any applicable law or
interpretation of the staff of the Commission;
(ii) any action or proceeding has been instituted or
threatened in any court or by or before any governmental agency
with respect to the Exchange Offer which, in the reasonable
judgment of the Company, would or might impair the ability of the
Company to proceed with the Exchange Offer;
(iii) there has been any material change, or development
involving a prospective change, in the business or financial
affairs of the Company or any of its subsidiaries which, in the
reasonable judgment of the Company, would materially impair the
Company's ability to consummate the Exchange Offer or have a
material adverse effect on the Company if the Exchange Offer is
consummated;
(iv) there has been proposed, adopted, or enacted any law,
statute, rule or regulation which, in the reasonable judgment of
the Company, might materially impair the ability of the Company
to proceed with the Exchange Offer or have a material adverse
effect on the Company if the Exchange Offer is consummated; or
(v) all governmental approvals which the Company shall
reasonably deem necessary for the consummation of the Exchange
Offer as contemplated shall not have been obtained.
If the Company determines in its sole discretion that any of
these circumstances exist, the Company may (i) refuse to accept
any Old Notes and return all tendered Old Notes to the tendering
Holders, (ii) extend the Exchange Offer and retain all Old Notes
tendered prior to the expiration of the Exchange Offer, subject,
however, to the rights of Holders who tendered such Old Notes to
withdraw their tendered Old Notes or (iii) waive any unsatisfied
conditions with respect to the Exchange Offer and accept all
properly tendered Old Notes which have not been withdrawn. If
such waiver constitutes a material change to the Exchange Offer,
the Company will promptly disclose such waiver by means of a
prospectus supplement that will be distributed to the Holders,
and the Company will extend the Exchange Offer for a period of
five to ten business days, depending upon the significance of the
waiver and the manner of disclosure to the Holders, if the
Exchange Offer would otherwise expire during such five to ten
business day period.
PROCEDURES FOR TENDERING
To tender Old Notes in the Exchange Offer, a Holder must
complete, sign and date the Letter of Transmittal, or facsimile
thereof, have the signatures thereon guaranteed if required by
the Letter of Transmittal, and mail or otherwise deliver such
Letter of Transmittal or such facsimile to the Exchange Agent
prior to the Expiration Date. In addition, either (i) a timely
confirmation of book-entry transfer (Book-Entry Confirmation) of
such Old Notes into the Exchange Agent's account at DTC
(Book-Entry Transfer Facility) pursuant to the procedure for
book-entry transfer described below must be received by the
Exchange Agent prior to the Expiration Date, or (ii) certificates
for such Old Notes must be received by the Exchange Agent along
with the Letter of Transmittal, or (iii) the Holder must comply
with the guaranteed delivery procedures described below. To be
tendered effectively, the Letter of Transmittal and other
required documents must be received by the Exchange Agent at the
address set forth below under "Exchange Agent" prior to the
Expiration Date.
A tender by a Holder which is not withdrawn prior to the
Expiration Date will constitute an agreement between such Holder
and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE
AGENT IS AT THE ELECTION AND RISK OF THE HOLDER. INSTEAD OF
DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT
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OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE
SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE
BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES
TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose interests in the Old Notes are
registered in the name of a broker, dealer, commercial bank,
trust company, nominee or other securities intermediary and who
wishes to tender should contact such securities intermediary
promptly and instruct such securities intermediary to tender on
such beneficial owner's behalf. If any such beneficial owner
whose Old Notes are in certificated form wishes to tender on such
owner's own behalf, such owner must, prior to completing and
executing the Letter of Transmittal and delivering such owner's
Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such owner's name or obtain a
properly completed assignment from the Holder. The transfer of
ownership may take considerable time and might not be completed
prior to the Expiration Date.
Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed by an Eligible
Institution (as defined below) unless the Old Notes tendered
pursuant thereto are tendered (i) by a Holder who has not
completed the box entitled "Special Payment Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution (as defined
below). In the event that signatures on a Letter of Transmittal
or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantor must be a member firm of a registered
national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an
"eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (Eligible Institution).
If the Letter of Transmittal is signed by a person other than
the Holder of any Old Notes in certificated form listed therein,
such Old Notes must be endorsed or accompanied by a properly
completed assignment signed by such Holder as such Holder's name
appears on such Old Notes.
If the Letter of Transmittal or any Old Notes or assignment
are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so
indicate when signing, and unless waived by the Company, evidence
satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including
time of receipt), acceptance of tendered Old Notes and withdrawal
of tendered Old Notes will be determined by the Company in its
sole discretion, which determination will be final and binding.
The Company reserves the absolute right to reject any and all Old
Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right to
waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Company's interpretation of the terms
and conditions of the Exchange Offer (including the instructions
in the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such
time as the Company shall determine. Although the Company
intends to notify registered Holders of defects or irregularities
with respect to tenders of Old Notes, none of the Company, the
Exchange Agent or any other person shall incur any liability for
failure to give such notification. Tenders of Old Notes will not
be deemed to have been made until such defects or irregularities
have been cured or waived. Any Old Notes received by the
Exchange Agent that are not properly tendered and as to which the
defects or irregularities have not been cured or waived will be
returned by the Exchange Agent as the case may be, to the
tendering registered Holders, unless otherwise provided in the
Letter of Transmittal, as soon as practicable following the
Expiration Date.
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<PAGE>
In addition, the Company reserves the right in its sole
discretion to purchase or make offers for any Old Notes that
remain outstanding subsequent to the Expiration Date or, as set
forth above under "Conditions," to terminate the Exchange Offer
and, to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could
differ from the terms of the Exchange Offer.
By tendering, each Holder will represent to the Company that,
among other things, (i) the New Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of
business of the person receiving beneficial ownership of such New
Notes, whether or not such person is the Holder, (ii) neither the
Holder nor any such other person is engaging in or intends to
engage in a distribution of such New Notes (iii) neither the
Holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution
of such New Notes, and (iv) neither the Holder nor any such other
person is an "affiliate," as defined in Rule 405 of the
Securities Act, of the Company.
In all cases, issuance of New Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Old
Notes or a timely Book-Entry Confirmation of such Old Notes into
the Exchange Agent's account at the Book-Entry Transfer Facility,
a properly completed and duly executed Letter of Transmittal and
all other required documents. If any tendered Old Notes are not
accepted for any reason set forth in the terms and conditions of
the Exchange Offer or if Old Notes are submitted for a greater
principal amount than the Holder desires to exchange, such
unaccepted or non-exchanged Old Notes will be returned without
expense to the tendering Holder thereof (or, in the case of Old
Notes tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described below, such
non-exchanged Old Notes will be credited to an account maintained
with such Book-Entry Transfer Facility) as promptly as
practicable after the expiration or termination of the Exchange
Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account
with respect to the Old Notes at the Book-Entry Transfer Facility
for purposes of the Exchange Offer within two business days after
the date of this Prospectus, and any financial institution that
is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's procedures
for transfer. However, although delivery of Old Notes may be
effected through book-entry transfer at the Book-Entry Transfer
Facility, the Letter of Transmittal or facsimile thereof, with
any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received by
the Exchange Agent at the address set forth below under "Exchange
Agent" on or prior to the Expiration Date or the guaranteed
delivery procedures described below must be complied with. As of
the date of this Prospectus, all of the outstanding Old Notes are
in book-entry form.
GUARANTEED DELIVERY PROCEDURES
Holders of Old Notes in certificated form who wish to tender
their Old Notes and (i) whose Old Notes are not immediately
available or (ii) who cannot deliver their Old Notes, the Letter
of Transmittal or any other required documents to the Exchange
Agent prior to the Expiration Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent
receives from such Eligible Institution a properly completed
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<PAGE>
and duly executed notice (Notice of Guaranteed Delivery), by
facsimile transmission, mail or hand delivery, setting forth
the name and address of the Holder, the certificate number(s)
of such Old Notes and the principal amount of Old Notes
tendered stating that the tender is being made thereby and
guaranteeing that, within five New York Stock Exchange trading
days after the Expiration Date, the Letter of Transmittal (or
facsimile thereof) together with the certificate(s)
representing the Old Notes and any other documents required by
the Letter of Transmittal will be deposited by the Eligible
Institution with the Exchange Agent; and
(c) Such properly completed and executed Letter of
Transmittal (or facsimile thereof), as well as the
certificate(s) representing all tendered Old Notes in proper
form for transfer and other documents required by the Letter
of Transmittal are received by the Exchange Agent within five
New York Stock Exchange trading days after the Expiration
Date.
Upon request to the Exchange Agent a Notice of Guaranteed
Delivery will be sent to Holders of Old Notes in certificated
form who wish to tender their Old Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may
be withdrawn at any time prior to 5:00 p.m., New York City time,
on the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a
Holder must send to the Exchange Agent, prior to 5:00 p.m., New
York City time on the Expiration Date, a telegram, facsimile
transmission or letter setting forth (i) the name of such Holder,
(ii) the principal amount of Old Notes delivered for exchange and
(iii) a statement that such Holder is withdrawing such Old Notes
for exchange. Any such notice of withdrawal must be signed by
the Holder in the same manner as the original signature on the
Letter of Transmittal by which such Old Notes were tendered
(including any required signature guarantees). If the Holder
tenders Old Notes in certificated form, such notice must also (i)
specify the name of the person having deposited such Old Notes
delivered for exchange and (ii) identify the Old Notes to be
withdrawn (including the certificate number). All questions as
to the validity, form and eligibility (including time of receipt)
of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Old
Notes so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no New Notes will
be issued with respect thereto unless the Old Notes so withdrawn
are validly retendered. Any Old Notes which have been tendered
but which are not accepted for payment will be returned to the
registered Holder thereof without cost to such Holder as soon as
practicable after withdrawal. Properly withdrawn Old Notes may
be retendered by following one of the procedures described above
under "Procedures for Tendering" at any time prior to the
Expiration Date.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent of
the Exchange Offer. Questions and requests for assistance,
requests for additional copies of this Prospectus or of the
Letter of Transmittal and requests for Notice of Guaranteed
Delivery with respect to the exchange of the Old Notes should be
directed to the Exchange Agent addressed as follows:
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By Registered Mail or Certified By Overnight Courier:
Mail:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services
Attention: Reorganization Section, Window
Theresa Gass Ground Level
Attention: Reorganization
Section,
Theresa Gass
By Telephone: By Facsimile:
(212) 815-5942 (212) 815-6339
FEES AND EXPENSES
The expenses of soliciting tenders will be paid by the
Company. The principal solicitation is being made by mail;
however, additional solicitation may be made by telecopier,
telephone or in person by officers and regular employees of the
Company and its affiliates.
The Company has not retained any dealer-manager in connection
with the Exchange Offer and will not make any payments to
brokers-dealers or others soliciting acceptances of the Exchange
Offer. The Company will pay the Exchange Agent reasonable and
customary fees for their services and will reimburse them for
their reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the
Exchange Offer will be paid by the Company and are estimated in
the aggregate to be approximately $ . Such expenses
include registration fees, fees and expenses of the Exchange
Agent, accounting and legal fees and printing costs, among
others.
The Company will pay all transfer taxes, if any, applicable to
the exchange of the Old Notes pursuant to the Exchange Offer.
If, however, certificates representing New Notes for principal
amounts not tendered or accepted for exchange are to be delivered
to, or are to be issued in the name of, any person other than the
Holder of Old Notes tendered, or if tendered the Old Notes are
registered in the name of, any person other than the person
signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of the Old Notes
pursuant to the Exchange Offer, then the amount of any such
transfer taxes (whether imposed on the registered Holder or any
other persons) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such
tendering Holder.
The Exchange Offer is being effected to satisfy the Company's
obligations under the Registration Rights Agreement. The Company
will not receive any proceeds from the Exchange Offer. In
consideration of issuing the New Notes in the Exchange Offer, the
Company will receive an equal principal amount of the Old Notes.
Old Notes that are properly tendered in the Exchange Offer and
not validly withdrawn will be accepted, cancelled and retired and
cannot be reissued.
USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of
the New Notes. The net proceeds of approximately $198,000,000
received by the Company from the sale of the Old Notes has been
used to make additional investments in the common stocks of its
subsidiary companies to enable such subsidiaries to fund
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construction programs, redeem their securities or retire them as
they mature and to repay short term borrowings incurred for
similar purposes.
DESCRIPTION OF THE NEW NOTES
GENERAL
The New Notes will be issued pursuant to an Indenture (for
Unsecured Debt Securities Series C) dated as of January 1, 1998
(Indenture), between the Company and The Bank of New York
(Trustee) pursuant to which the Old Notes were issued and an
officer's certificate establishing the New Notes (Officer's
Certificate).
The following description of the terms of the New Notes does
not purport to be complete and is qualified in its entirety by
reference to (i) the Indenture and (ii) the Officer's
Certificate. Whenever particular provisions or defined terms in
the Indenture and Officer's Certificate are referred to under
this DESCRIPTION OF NEW NOTES, such provisions or defined terms
are incorporated by reference herein.
The Indenture provides for the issuance of debt securities
(including the New Notes), notes or other unsecured evidences of
indebtedness by the Company (each a Debt Security) in an
unlimited amount from time to time. The New Notes will be
unsecured obligations of the Company which, so long as they are
unsecured, will rank pari passu in right of payment of principal
and interest with all other existing and future senior unsecured
obligations of the Company. The Indenture provides that the
Company may not grant a lien on the capital stock of any of its
subsidiaries to secure debt obligations of the Company without
similarly securing the New Notes, with certain exceptions.
However, the Indenture does not limit the aggregate amount of
indebtedness the Company or its subsidiaries may issue. The
Company is a holding company that derives substantially all of
its income from its operating subsidiaries. The New Notes
therefore will be effectively subordinated to debt and preferred
stock at the subsidiary level. The financial statements of the
Company and its predecessors included in the Incorporated
Documents show the aggregate amount of such subsidiary debt and
preferred stock and other debt of the Company as of the date of
such statements.
New Notes will be represented by a Global Certificate, will be
issued only in fully registered form and, when issued, will be
registered in the name of Cede & Co., as registered owner and as
nominee for DTC. DTC will act as securities depository for the
New Notes, with certain exceptions. Purchases of beneficial
interests in the New Notes will be made in book-entry form.
Except as described below, purchasers of such beneficial
interests will not receive certificates representing their
beneficial interests in the New Notes. See "Book-Entry" below.
Purchases of New Notes or beneficial interests therein may be
made in denominations of $5,000 or any integral multiples of
$1,000 in excess thereof.
PRINCIPAL AMOUNT, INTEREST AND MATURITY
The New Notes will be issued as a series of Debt Securities
under the Indenture. The Officer's Certificate limits the
aggregate principal amount of the New Notes to $200,000,000.
The New Notes will mature on January 1, 2008. The New Notes
will bear interest at the rate per annum shown in the title
thereof, payable semi-annually in arrears on January 1 and July 1
in each year. The New Notes will bear interest from the date of
the most recent Interest Payment Date for the Old Notes to which
interest has been paid or duly provided for with respect to such
Old Notes, or if no such interest has been paid or duly provided
for, from January 13, 1998, but if interest has been paid on or
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duly provided for with respect to the New Notes, then from the
most recent Interest Payment Date to which interest has been paid
or duly provided for. Interest will be paid to the persons in
whose names New Notes are registered at the close of business on
the 15th day of the calendar month next preceding each semi-
annual interest payment date. The amount of interest payable for
any period will be computed on the basis of a 360-day year of
twelve 30-day months and for any period shorter than a full
month, on the basis of the actual number of days elapsed (Section
310). In the event that any date on which interest is payable on
the New Notes is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and
effect as if made on the date the payment was originally payable
(Section 113).
Principal and interest payments on the New Notes will be made
by the Company to Cede & Co. (as nominee of DTC) so long as Cede
& Co. is the registered owner. Disbursement of such payments to
the DTC Participants is the responsibility of DTC, and
disbursement of such payments to the beneficial owners of the New
Notes is the responsibility of DTC Participants and Indirect
Participants, all as described below under "Book-Entry Only -The
Depositary Trust Company."
REDEMPTION
The New Notes will not be redeemable prior to Maturity.
PAYMENT AND PAYING AGENTS
Interest on each New Note on each Interest Payment Date will
be paid to the Person in whose name such New Note is registered
as of the close of business on the Regular Record Date relating
to such Interest Payment Date; provided, however, that interest
payable at maturity (whether at Stated Maturity, upon redemption
or otherwise, hereinafter a Maturity) will be paid to the Person
to whom principal is paid. However, if there has been a default
in the payment of interest on any New Note, such defaulted
interest may be payable to the Person in whose name such New Note
is registered as of the close of business on a date selected by
the Trustee which is not more than 15 days and not less than 10
days prior to the date proposed by the Company for payment of
such defaulted interest or in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which such New Note may be listed, if the Trustee deems such
manner of payment practicable (Indenture, Section 307).
The principal of and premium, if any, and interest on, the New
Notes at Maturity will be payable upon presentation of the New
Notes at the corporate trust office of The Bank of New York, in
The City of New York, as Paying Agent for the Company. The
Company may change the Place of Payment on the New Notes, may
appoint one or more additional Paying Agents (including the
Company) and may remove any Paying Agent, all at its discretion
(Indenture, Section 602).
REGISTRATION AND TRANSFER
The transfer of New Notes may be registered, and New Notes may
be exchanged for other New Notes of authorized denominations and
of like tenor and aggregate principal amount, at the corporate
trust office of The Bank of New York in The City of New York, as
Security Registrar for the New Notes. The Company may change the
place for registration of transfer and exchange of the New Notes
and may designate one or more additional places for such
registration and exchange, all at its discretion. No service
charge will be made for any transfer or exchange of the New
Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of the
New Notes (Indenture, Section 3.05).
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DEFEASANCE
The principal amount of any series of Debt Securities issued
under the Indenture will be deemed to have been paid for purposes
of the Indenture and the entire indebtedness of the Company in
respect thereof will be deemed to have been satisfied and
discharged if there will have been irrevocably deposited with the
Trustee or any Paying Agent, in trust: (a) money in an amount
which will be sufficient, or (b) in the case of a deposit made
prior to the maturity of the Debt Securities, Eligible
Obligations (as defined below), the principal of and the interest
on which when due, without any regard to reinvestment thereof,
will provide moneys which, together with the money, if any,
deposited with or held by the Trustee, will be sufficient, or (c)
a combination of (a) and (b) which will be sufficient, to pay
when due the principal of and premium, if any, and interest, if
any, due and to become due on the Debt Securities of such series
that are Outstanding. For this purpose, Eligible Obligations
include direct obligations of, or obligations unconditionally
guaranteed by, the United States entitled to the benefit of the
full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership
interest in such obligations or in any specific interest or
principal payments due in respect thereof and which do not
contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof.
LIMITATION ON LIENS
The Indenture provides that, except as otherwise specified
with respect to a particular series of Debt Securities, so long
as any Debt Securities of any series are Outstanding, the Company
will not pledge, mortgage, hypothecate or grant a security
interest in, or permit any mortgage, pledge, security interest or
other lien upon, any capital stock of any Subsidiary (hereinafter
defined) now or hereafter owned by the Company to secure any
Indebtedness (hereinafter defined), without making effective
provision whereby the Outstanding Debt Securities shall (so long
as such other Indebtedness shall be so secured) be equally and
ratably secured with any and all such other Indebtedness and any
other indebtedness similarly entitled to be equally and ratably
secured. This restriction does not apply to, or prevent the
creation or existence of, (i) any mortgage, pledge, security
interest, lien or encumbrance upon any such capital stock created
at the time of the acquisition of such capital stock by the
Company or within one year after such time to secure all or a
portion of the purchase price for such capital stock; (ii) any
mortgage, pledge, security interest, lien or encumbrance upon any
such capital stock existing thereon at the time of the
acquisition thereof by the Company (whether or not the
obligations secured thereby are assumed by the Company); or (iii)
any extension, renewal or refunding of any mortgage, pledge,
security interest, lien or encumbrance described in (i) or (ii)
above on capital stock of any Subsidiary theretofore subject
thereto (or substantially the same capital stock) or any portion
thereof. In addition, this restriction will not apply to, and
there will be excluded in computing secured Indebtedness for the
purpose of such restriction, Indebtedness secured by any
judgment, levy, execution, attachment or other similar lien
arising in connection with court proceedings, provided that
either (i) the execution or enforcement of each such lien is
effectively stayed within 30 days after entry of the
corresponding judgment (or the corresponding judgment has been
discharged within such 30 day period) and the claims secured
thereby are being contested in good faith by appropriate
proceedings timely commenced and diligently prosecuted; (ii) the
payment of each such lien is covered in full by insurance and the
insurance company has not denied or contested coverage thereof;
or (iii) so long as each such lien is adequately bonded, any
appropriate legal proceedings that may have been duly initiated
for the review of the corresponding judgment, decree or order
shall not have been fully terminated or the period within which
such proceedings may be initiated shall not have expired
(Indenture, Section 608).
For purposes of the restriction described in the preceding
paragraph, "Indebtedness" means (i) all indebtedness, whether or
not represented by bonds, debentures, notes or other securities,
created or assumed by the Company for the repayment of money
borrowed; (ii) all indebtedness for money borrowed secured by a
lien upon property owned by the Company and upon which
indebtedness for money borrowed the Company customarily pays
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interest, although the Company has not assumed or become liable
for the payment of such indebtedness for money borrowed; and
(iii) all indebtedness of others for money borrowed which is
guaranteed as to payment of principal by the Company or in effect
guaranteed by the Company through a contingent agreement to
purchase such indebtedness for money borrowed, but excluding from
this definition any other contingent obligation of the Company in
respect of indebtedness for money borrowed or other obligations
incurred by others (Indenture, Section 608). "Subsidiary" means
a corporation more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting
stock" means stock that ordinarily has voting power for the
election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any
contingency (Indenture, Section 101).
Notwithstanding the foregoing, except as otherwise specified
in the Officer's Certificate with respect to a particular series
of Debt Securities, the Company may, without securing the Debt
Securities, pledge, mortgage, hypothecate or grant a security
interest in, or permit any mortgage, pledge, security interest or
other lien (in addition to liens expressly permitted as described
in the second preceding paragraph) upon, capital stock of any
Subsidiary now or hereafter owned by the Company to secure any
Indebtedness (which would otherwise be subject to the foregoing
restriction) in an aggregate amount which, together with all
other such Indebtedness, does not exceed 5% of Consolidated
Capitalization. For this purpose, "Consolidated Capitalization"
means the sum obtained by adding (i) Consolidated Shareholders'
Equity, (ii) Consolidated Indebtedness for money borrowed
(exclusive of any thereof which is due and payable within one
year of the date such sum is determined) and, without
duplication, (iii) any preference or preferred stock of the
Company or any Consolidated Subsidiary which is subject to
mandatory redemption or sinking fund provisions (Indenture,
Section 608).
The term "Consolidated Shareholders' Equity" (as used above)
means the total Assets of the Company and its Consolidated
Subsidiaries less all liabilities of the Company and its
Consolidated Subsidiaries. As used in the foregoing definition,
"liabilities" means all obligations which would, in accordance
with generally accepted accounting principles in the United
States, be classified on a balance sheet as liabilities,
including without limitation, (i) indebtedness secured by
property of the Company or any of its Consolidated Subsidiaries
whether or not the Company or such Consolidated Subsidiary is
liable for the payment thereof unless, in the case that the
Company or such Consolidated Subsidiary is not so liable, such
property has not been included among the Assets of the Company or
such Consolidated Subsidiary on such balance sheet, (ii) deferred
liabilities and (iii) indebtedness of the Company or any of its
Consolidated Subsidiaries that is expressly subordinated in right
and priority of payment to other liabilities of the Company or
such Consolidated Subsidiary. As used in this definition,
"liabilities" includes preference or preferred stock of the
Company or any Consolidated Subsidiary only to the extent of any
such preference or preferred stock that is subject to mandatory
redemption or sinking fund provisions (Indenture, Section 608).
The term "Consolidated Subsidiary" (as used above) means at
any date any Subsidiary the financial statements of which under
generally accepted accounting principles would be consolidated
with those of the Company in its consolidated financial
statements as of such date. The "Assets" of any Person means the
whole or any part of its business, property, assets, cash and
receivables. The term "Consolidated Indebtedness" means total
indebtedness as shown on the consolidated balance sheet of the
Company and its Consolidated Subsidiaries (Indenture, Section
608).
As of December 31, 1997, the Consolidated Capitalization of
the Company was $16,802,381,000.
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ASSIGNMENT OF OBLIGATIONS
The Company may assign its obligations under any series of the
Debt Securities, including the New Notes, to a directly or
indirectly wholly-owned subsidiary of the Company pursuant to a
written assumption of such obligations by such subsidiary,
provided that no Event of Default, or event which with the
passage of time or the giving of required notice, or both, would
become an Event of Default, has occurred and is continuing. As
conditions to such assumption, the subsidiary assuming such
obligations will be required to deliver to the Trustee and to the
Company an assumption agreement and a supplemental indenture
satisfactory in form and substance to the Trustee pursuant to
which such subsidiary (i) assumes, on a full recourse basis, the
Company's obligations on the Debt Securities and the obligations
under the Indenture relating to the Debt Securities, and
(ii) agrees that any covenants made by the Company with respect
to such Debt Securities will become solely covenants of, and
shall relate to, such subsidiary. In addition, such subsidiary
shall assume the Company's obligations under the Registration
Rights Agreement.
At the time of such assumption the Company will
unconditionally guarantee payment of such series of Debt
Securities and will execute a guarantee in form and substance
satisfactory to the Trustee. Pursuant to such guarantee, the
Company will fully and unconditionally guarantee the payment of
the obligations of the assuming subsidiary under the Debt
Securities and under the Indenture relating to the Debt
Securities, including, without limitation, payment, as and when
due, of the principal of, premium, if any, and interest on, the
Debt Securities. The Company will be released and discharged
from all its other obligations under the Indenture.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Under the terms of the Indenture, the Company may not
consolidate with or merge into any other entity or convey,
transfer or lease its properties and assets substantially as an
entirety to any entity, unless (i) the entity formed by such
consolidation or into which the Company is merged or the entity
which acquires by conveyance or transfer, or which leases, the
property and assets of the Company substantially as an entirety
will be a entity organized and validly existing under the laws of
any domestic jurisdiction and such entity expressly assumes the
Company's obligations on all Debt Securities and under the
Indenture, (ii) immediately after giving effect to the
transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of
Default, will have occurred and be continuing, and (iii) the
Company will have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel as provided in the
Indenture (Indenture, Section 1101). The terms of the Indenture
do not restrict the Company in a merger in which the Company is
the surviving entity.
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default
under the Indenture with respect to the Debt Securities of any
series: (a) failure to pay any interest on the Debt Securities
of such series within 30 days after the same becomes due and
payable; (b) failure to pay principal or premium, if any, on the
Debt Securities of such series when due and payable; (c) failure
to perform, or breach of, any other covenant or warranty of the
Company in the Indenture (other than a covenant or warranty of
the Company in the Indenture solely for the benefit of one or
more series of Debt Securities other than such series) for 60
days after written notice to the Company by the Trustee, or to
the Company and the Trustee by the Holders of at least 33% in
principal amount of the Debt Securities of such series
Outstanding under the Indenture as provided in the Indenture; (d)
the entry by a court having jurisdiction in the premises of (1) a
decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or
state bankruptcy, insolvency, reorganization or other similar law
or (2) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition by one or
more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of the
Company under any applicable Federal or state law, or appointing
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a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official for the Company or for any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order for
relief or any such other decree or order will have remained
unstayed and in effect for a period of 90 consecutive days; and
(e) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Company in a case or other similar proceeding or
to the commencement of any bankruptcy or insolvency case or
proceeding against it under any applicable Federal or state law
or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state
law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official
of the Company of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of such action
by the Board of Directors (Indenture, Section 801).
An Event of Default with respect to the Debt Securities of a
particular series may not necessarily constitute an Event of
Default with respect to Debt Securities of any other series
issued under the Indenture.
REMEDIES
If an Event of Default due to the default in payment of
principal of or interest on any series of Debt Securities or due
to the default in the performance or breach of any other covenant
or warranty of the Company applicable to the Debt Securities of
such series but not applicable to all series occurs and is
continuing, then either the Trustee or the holders of 33% in
principal amount of the Outstanding Debt Securities of such
series may declare the principal of all of the Debt Securities of
such series and interest accrued thereon to be due and payable
immediately. If an Event of Default due to the default in the
performance of any other covenants or agreements in the Indenture
applicable to all Outstanding Debt Securities or due to certain
events of bankruptcy, insolvency or reorganization of the Company
has occurred and is continuing, either the Trustee or the holders
of not less than 33% in principal amount of all Outstanding Debt
Securities, considered as one class, and not the holders of the
Debt Securities of any one of such series, may make such
declaration of acceleration. There is no automatic acceleration,
even in the event of bankruptcy, insolvency or reorganization of
the Company.
At any time after the declaration of acceleration with respect
to the Debt Securities of any series has been made and before a
judgment or decree for payment of the money due has been
obtained, the Event or Events of Default giving rise to such
declaration of acceleration will, without further act, be deemed
to have been waived, and such declaration and its consequences
will, without further act, be deemed to have been rescinded and
annulled, if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest on all Debt Securities of such
series;
(2) the principal of and premium, if any, on any Debt
Securities of such series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Debt Securities;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Debt Securities, to the extent that
payment of such interest is lawful; and
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(4) all amounts due to the Trustee under the Indenture; and
(b) any other Event or Events of Default with respect to Debt
Securities of such series, other than the nonpayment of the
principal of the Debt Securities of such series which has become
due solely by such declaration of acceleration, have been cured
or waived as provided in the Indenture (Indenture, Section 802).
Subject to the provisions of the Indenture relating to the
duties of the Trustee, in case an Event of Default will occur and
be continuing, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders, unless such holders
will have offered to the Trustee reasonable indemnity (Indenture,
Section 903). If an Event of Default has occurred and is
continuing in respect of a series of Debt Securities, subject to
such provisions for the indemnification of the Trustee, the
holders of a majority in principal amount of the Outstanding Debt
Securities of such series will have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Debt Securities of
such series; provided, however, that if an Event of Default
occurs and is continuing with respect to more than one series of
Debt Securities, the holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of all such series,
considered as one class, will have the right to make such
direction, and not the holders of the Debt Securities of any one
of such series; and provided, further, that such direction will
not be in conflict with any rule of law or with the Indenture
(Indenture, Section 812).
No Holder of Debt Securities of any series will have any right
to institute any proceeding with respect to the Indenture, or for
the appointment of a receiver or a trustee, or for any other
remedy thereunder, unless (i) such holder has previously given to
the Trustee written notice of a continuing Event of Default with
respect to the Debt Securities of such series, (ii) the holders
of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of all series in respect of which an
Event of Default will have occurred and be continuing, considered
as one class, have made written request to the Trustee, and such
holder or holders have offered reasonable indemnity to the
Trustee to institute such proceeding in respect of such Event of
Default in its own name as trustee and (iii) the Trustee has
failed to institute any proceeding, and has not received from the
holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of such series a direction
inconsistent with such request, within 60 days after such notice,
request and offer (Indenture, Section 807). However, such
limitations do not apply to a suit instituted by a holder of a
Debt Security for the enforcement of payment of the principal of
or any premium or interest on such Debt Security on or after the
applicable due date specified in such Debt Security (Indenture,
Section 808).
The Company will be required to furnish to the Trustee
annually a statement by an appropriate officer as to such
officer's knowledge of the Company's compliance with all
conditions and covenants under the Indenture, such compliance to
be determined without regard to any period of grace or
requirement of notice under the Indenture (Indenture, Section
606).
MODIFICATION AND WAIVER
Without the consent of any holder of Debt Securities, the
Company and the Trustee may enter into one or more supplemental
indentures for any of the following purposes: (a) to evidence the
assumption by any permitted successor to the Company of the
covenants of the Company in the Indenture and in the Debt
Securities; or (b) to add one or more covenants of the Company or
other provisions for the benefit of all holders or for the
benefit of the holders of, or to remain in effect only so long as
there will be Outstanding, Debt Securities of one or more
specified series, or one or more specified Tranches thereof, or
to surrender any right or power conferred upon the Company by the
Indenture; or (c) to add any additional Events of Default with
respect to Outstanding Debt Securities; or (d) to change or
eliminate any provision of the Indenture or to add any new
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provision to the Indenture, provided that if such change,
elimination or addition will adversely affect the interests of
the holders of Debt Securities of any series or Tranche in any
material respect, such change, elimination or addition will
become effective with respect to such series or Tranche only (1)
when the consent of the holders of Debt Securities of such series
or Tranche has been obtained in accordance with the Indenture, or
(2) when no Debt Securities of such series or Tranche remain
Outstanding under the Indenture; or (e) to provide collateral
security for all but not part of the Debt Securities; or (f) to
establish the form or terms of Debt Securities of any other
series or Tranche as permitted by the Indenture; or (g) to
provide for the authentication and delivery of bearer securities
and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the
solicitation of the vote or consent of, the holders thereof, and
for any and all other matters incidental thereto; or (h) to
evidence and provide for the acceptance of appointment of a
successor Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of the
Indenture as will be necessary to provide for or to facilitate
the administration of the trusts under the Indenture by more than
one trustee; or (i) to provide for the procedures required to
permit the utilization of a noncertificated system of
registration for the Debt Securities of all or any series or
Tranche; or (j) to change any place where (1) the principal of
and premium, if any, and interest, if any, on all or any series
or Tranche of Debt Securities will be payable, (2) all or any
series or Tranche of Debt Securities may be surrendered for
registration of transfer or exchange and (3) notices and demands
to or upon the Company in respect of Debt Securities and the
Indenture may be served; or (k) to cure any ambiguity or
inconsistency or to add or change any other provisions with
respect to matters and questions arising under the Indenture,
provided such changes or additions will not adversely affect the
interests of the holders of Debt Securities of any series or
Tranche in any material respect (Indenture, Section 1201).
The holders of a majority in aggregate principal amount of the
Debt Securities of all series then Outstanding may waive
compliance by the Company with certain restrictive provisions of
the Indenture (Indenture, Section 607). The holders of not less
than a majority in principal amount of the Outstanding Debt
Securities of any series may waive any past default under the
Indenture with respect to such series, except a default in the
payment of principal, premium, or interest and certain covenants
and provisions of the Indenture that cannot be modified or be
amended without the consent of the holder of each Outstanding
Debt Security of such series affected (Indenture, Section 813).
Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of the Indenture in such
a way as to require changes to the Indenture or the incorporation
therein of additional provisions or so as to permit changes to,
or the elimination of, provisions which, at the date of the
Indenture or at any time thereafter, were required by the Trust
Indenture Act to be contained in the Indenture, the Indenture
will be deemed to have been amended so as to conform to such
amendment of the Trust Indenture Act or to effect such changes,
additions or elimination, and the Company and the Trustee may,
without the consent of any holders, enter into one or more
supplemental indentures to evidence or effect such amendment
(Indenture, Section 1201).
Except as provided above, the consent of the holders of a
majority in aggregate principal amount of the Debt Securities of
all series then Outstanding, considered as one class, is required
for the purpose of adding any provisions to, or changing in any
manner, or eliminating any of the provisions of, the Indenture or
modifying in any manner the rights of the holders of such Debt
Securities under the Indenture pursuant to one or more
supplemental indentures; provided, however, that if less than all
of the series of Debt Securities Outstanding are directly
affected by a proposed supplemental indenture, then the consent
only of the holders of a majority in aggregate principal amount
of Outstanding Debt Securities of all series so directly
affected, considered as one class, will be required; and
provided, further, that if the Debt Securities of any series will
have been issued in more than one Tranche and if the proposed
supplemental indenture will directly affect the rights of the
holders of Debt Securities of one or more, but less than all, of
such Tranches, then the consent only of the holders of a majority
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in aggregate principal amount of the Outstanding Debt Securities
of all Tranches so directly affected, considered as one class,
will be required; and provided further, that no such amendment or
modification may (a) change the Stated Maturity of the principal
of, or any installment of principal of or interest on, any Debt
Security, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest
thereon) or change the method of calculating such rate or reduce
any premium payable upon the redemption thereof, or change the
coin or currency (or other property) in which any Debt Security
or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment
on or after the Stated Maturity of any Debt Security (or, in the
case of redemption, on or after the redemption date) without, in
any such case, the consent of the holder of such Debt Security,
(b) reduce the percentage in principal amount of the Outstanding
Debt Security of any series, or any Tranche thereof, the consent
of the holders of which is required for any such supplemental
indenture, or the consent of the holders of which is required for
any waiver of compliance with any provision of the Indenture or
any default thereunder and its consequences, or reduce the
requirements for quorum or voting, without, in any such case, the
consent of the holder of each Outstanding Debt Security of such
series or Tranche, or (c) modify certain of the provisions of the
Indenture relating to supplemental indentures, waivers of certain
covenants and waivers of past defaults with respect to the Debt
Security of any series or Tranche, without the consent of the
holder of each Outstanding Debt Security affected thereby. A
supplemental indenture which changes or eliminates any covenant
or other provision of the Indenture which has expressly been
included solely for the benefit of one or more particular series
of Debt Securities or one or more Tranches thereof, or modifies
the rights of the holders of Debt Securities of such series with
respect to such covenant or other provision, will be deemed not
to affect the rights under the Indenture of the holders of the
Debt Securities of any other series or Tranche (Indenture,
Section 1202).
The Indenture provides that in determining whether the holders
of the requisite principal amount of the Outstanding Debt
Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, or
whether a quorum is present at the meeting of the holders of Debt
Securities, Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company
or of such other obligor (unless the Company, such affiliate or
such obligor owns all Debt Securities Outstanding under the
Indenture, determined without regard to this provision) will be
disregarded and deemed not to be Outstanding.
If the Company shall solicit from holders any request, demand,
authorization, direction, notice, consent, election, waiver or
other Act, the Company may, at its option, fix in advance a
record date for the determination of holders entitled to give
such request, demand, authorization, direction, notice, consent,
waiver or other such act, but the Company will have no obligation
to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the
holders of record at the close of business on such record date
will be deemed to be holders for the purposes of determining
whether holders of the requisite proportion of the Outstanding
Debt Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Debt
Securities will be computed as of the record date. Any request,
demand, authorization, direction, notice, consent, election,
waiver or other Act of a holder will bind every future holder of
the same Debt Security and the holder of every Debt Security
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted
or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such
Debt Security (Indenture, Section 104).
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RESIGNATION OF TRUSTEE
The Trustee may resign at any time by giving written notice
thereof to the Company or may be removed at any time by Act of
the holders of a majority in principal amount of all series of
Debt Securities then Outstanding delivered to the Trustee and the
Company. No resignation or removal of the Trustee and no
appointment of a successor trustee will become effective until
the acceptance of appointment by a successor trustee in
accordance with the requirements of the Indenture. So long as no
Event of Default or event which, after notice or lapse of time,
or both, would become an Event of Default has occurred and is
continuing and except with respect to a Trustee appointed by Act
of the holders, if the Company has delivered to the Trustee a
resolution of its Board of Directors appointing a successor
trustee and such successor has accepted such appointment in
accordance with the terms of the Indenture, the Trustee will be
deemed to have resigned and the successor will be deemed to have
been appointed as trustee in accordance with the Indenture
(Indenture, Section 910).
NOTICES
Notices to holders of Debt Securities will be given by mail to
the addresses of such holders as they may appear in the security
register therefor.
TITLE
The Company, the Trustee, and any agent of the Company or the
Trustee, may treat the Person in whose name Debt Securities are
registered as the absolute owner thereof (whether or not such
Debt Securities may be overdue) for the purpose of making
payments and for all other purposes irrespective of notice to the
contrary.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
The Trustee under the Indenture is The Bank of New York. The
Company and certain of its subsidiaries also maintain various
banking and trust relationships with The Bank of New York.
BOOK-ENTRY ONLY - THE DEPOSITORY TRUST COMPANY
The certificates representing the New Notes will be issued in
fully registered form, without coupons. The New Notes will be
deposited with, or on behalf of, DTC, and registered in the name
of Cede & Co., as DTC's nominee in the form of one or more Global
Certificates for the New Notes or will remain in the custody of
the Trustee pursuant to a FAST Balance Certificate Agreement
between DTC and the Trustee. Upon the issuance of the Global
Certificates, DTC or its custodian will credit, on its internal
system, the respective principal amount of the individual
beneficial interests represented by such Global Certificates to
the accounts of persons who have accounts with such depositary.
Ownership of beneficial interests in a Global Certificate will be
limited to persons who have accounts with DTC (participants) or
persons who hold interests through participants. Ownership of
beneficial interests in a Global Certificate will be shown on,
and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee (with respect to
interests of participants) and the records of participants (with
respect to interests of persons other than participants).
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So long as DTC, or its nominee, is the registered owner or
Holder of a Global Certificate, DTC or such nominee, as the case
may be, will be considered the sole owner or Holder of the New
Notes represented by such Global Certificate for all purposes
under the Indenture and the New Notes. No beneficial owner of an
interest in a Global Certificate will be able to transfer the
interest except in accordance with DTC's applicable procedures,
in addition to those provided for under the Indenture.
Payments of the principal of, and interest on, a Global
Certificate will be made to DTC or its nominee, as the case may
be, as the registered owner thereof. Neither the Company, the
Trustee nor any Paying Agent will have any responsibility or
liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in a Global
Certificate or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. DTC or
its nominee, upon receipt of any payment of principal or interest
in respect of a Global Certificate, will credit participants'
accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such
Global Certificate as shown on the records of DTC or its nominee.
The Company also expects that payments by participants to owners
of beneficial interests in such Global Certificate held through
such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for
the accounts of customers registered in the names of nominees for
such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in the
ordinary way in accordance with DTC rules.
DTC will take any action permitted to be taken by a Holder of
New Notes (including the presentation of New Notes for exchange
as described below) only at the direction of one or more
participants to whose account the DTC interests in a Global
Certificate is credited and only in respect of such portion of
the aggregate principal amount of the New Notes as to which such
participant or participants has or have given such direction.
However, if there is an Event of Default (as defined) under the
New Notes, DTC will exchange a Global Certificate for
certificated notes, which it will distribute to its participants.
DTC is a limited purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the
need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other
organizations. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a
participant, either directly or indirectly (indirect
participants). The rules applicable to DTC and its participants
are on file with the Commission.
Although DTC is expected to follow the foregoing procedures in
order to facilitate transfers of interests in the Global Notes
among their respective participants, they are under no obligation
to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company
nor the Trustee will have any responsibility for the performance
by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing
their operations.
If DTC is at any time unwilling or unable to continue as a
depositary for a Global Certificate and a successor depositary is
not appointed by the Company within 90 days, the Company will
issue certificated notes in exchange for a Global Certificate.
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Secondary trading in long-term bonds and notes of corporate
issuers is generally settled in clearing house or next day funds.
In contrast, beneficial interests in the New Notes that are not
certificated notes, as defined below, will trade in DTC's Same-
Day Funds Settlement System until maturity. Therefore, the
secondary market trading activity in such interests will settle
in immediately available funds. No assurance can be given as to
the effect, if any, of settlement in immediately available funds
on trading activity in the New Notes.
The information under this caption "Book-Entry Only - The
Depository Trust Company" concerning DTC and DTC's book-entry
system has been obtained from sources that the Company believes
to be reliable, but the Company does not take any responsibility
for the accuracy thereof.
CERTIFICATED NOTES
If (i) the Company notifies the Trustee in writing that the
DTC is no longer willing or able to act as a depositary and the
Company is unable to locate a qualified successor within 90 days
or (ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of New Notes in the
form of certificated New Notes under the Indenture, then, upon
surrender by the DTC of its Global Notes, New Notes in such form
will be issued to each person that the Global Note Holder and the
DTC identify as being the Beneficial Owner of the related New
Notes.
Neither the Company nor the Trustee will be liable for any
delay by the DTC in identifying the Beneficial Owners of New
Notes and the Company and the Trustee may conclusively rely on,
and will be protected in relying on, instructions from the DTC
for all purposes.
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture will require that payments in respect of the New
Notes represented by the Global Note (including principal,
premium, if any, and interest, if any) be made in immediately
available funds. With respect to certificated notes, however, the
Company will make all payments of principal, premium, if any,
interest, if any, by mailing a check to each Holder's registered
address. The Company expects that secondary trading in the
certificated notes will also be settled in immediately available
funds.
LACK OF PUBLIC MARKET
The New Notes are new issues of securities for which there is
currently no active trading market. If any New Notes are traded
after their initial issuance, they may trade at a discount from
their face value, depending upon prevailing interest rates, the
market for similar securities and other factors, including
general economic conditions and the financial condition,
performance of, and the prospects for the Company.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal
income tax consequences of the acquisition, ownership and
disposition of the New Notes as of the date hereof and represents
the opinion of Reid & Priest LLP, counsel to the Company, insofar
as it relates to matters of law or legal conclusions. Except
where noted, it deals only with New Notes held as capital assets
and does not deal with special situations, such as those of
dealers in securities or currencies, financial institutions, life
insurance companies, persons holding New Notes as a part of a
hedging or conversion transaction or a straddle, or persons who
are not United States Holders (as defined herein). In addition,
this discussion does not address the tax consequences to persons
who acquire New Notes other than pursuant to their initial
issuance and distribution. Furthermore, the discussion below is
based upon the provisions of the Internal Revenue Code of 1986,
as amended, and regulations, rulings and judicial decisions
thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified at any time, with either forward-
looking or retroactive effect, so as to result in United States
federal income tax consequences different from those discussed
below.
PROSPECTIVE HOLDERS OF NEW NOTES, INCLUDING PERSONS WHO ARE
NOT UNITED STATES HOLDERS AND PERSONS WHO PURCHASE NEW NOTES IN
THE SECONDARY MARKET, ARE ADVISED TO CONSULT WITH THEIR TAX
ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NEW NOTES IN LIGHT
OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY
STATE, LOCAL OR OTHER TAX LAWS.
UNITED STATES HOLDERS
As used herein, a "United States Holder" means a Holder of a
New Note that is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in
or under the laws of the United States or any political
subdivision thereof, an estate, the income of which is subject to
United States federal income taxation regardless of its source,
or a trust, the administration of which is subject to the primary
supervision of a court within the United States and for which one
or more United States persons have the authority to control all
substantial decisions.
PAYMENTS OF INTEREST
Stated interest on a New Note will generally be taxable to a
United States Holder as ordinary income at the time it is paid or
accrued in accordance with the United States Holder's method of
accounting for tax purposes.
EXCHANGE OF OLD NOTES FOR NEW NOTES
An exchange of the Old Notes for the New Notes should not
constitute a taxable event for federal income tax purposes
because the New Notes should not be considered to differ
materially in kind or extent from the Old Notes. Rather, the New
Notes should be treated as a continuation of the Old Notes in the
hands of a United States Holder. As a result, United States
Holders who exchange their Old Notes for New Notes should not
recognize any income, gain or loss for federal income tax
purposes with respect to such exchange. The following discussion
assumes that an exchange of Old Notes for New Notes will not be
treated as a taxable exchange for federal income tax purposes.
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SALE, EXCHANGE AND MATURITY OF THE NEW NOTES
Upon the sale, exchange or maturity of New Notes, a United
States Holder will recognize gain or loss equal to the difference
between such Holder's adjusted tax basis in the New Notes and the
amount realized upon the sale, exchange or maturity, other than
amounts attributable to accrued but unpaid interest. A United
States Holder's adjusted tax basis will be, in general, the issue
price of the New Notes. Such gain or loss will be capital gain
or loss and will be long-term capital gain or loss if at the time
of sale or maturity, the New Notes have been held for more than
18 months. Under current law, deductibility of capital losses is
subject to limitations. The net capital gains of individuals are
taxed, under certain circumstances, at lower rates than ordinary
income.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Subject to the qualification discussed below, interest income
on the New Notes will be reported to United States Holders on
Form 1099, which should be mailed to such Holders by January 31
following each calendar year.
The Company will report annually to Cede & Co. the interest
income paid during the year with respect to the New Notes for
which Cede & Co. is the Holder of record. The Company currently
intends to report such information on Form 1099 prior to January
31 following each calendar year. The Initial Purchasers have
indicated to the Company that, to the extent that they hold New
Notes as nominee for beneficial United States Holders, they
currently expect to report the interest income paid during the
calendar year on such New Notes to such beneficial Holders on
Forms 1099 by January 31 following each calendar year. Under
current law, Holders of New Notes who hold as nominees for
beneficial Holders will not have any obligation to report
information regarding the beneficial Holders to the Company. The
Company, moreover, will not have any obligation to report to
beneficial Holders who are not also record Holders. Thus,
beneficial United States Holders of New Notes who hold their New
Notes through the Initial Purchasers will receive Forms 1099
reflecting the income on their New Notes from such nominee
Holders rather than from the Company.
Payments made in respect of, and proceeds from the sale or
exchange of, New Notes may be subject to "backup" withholding tax
of 31% if the United States Holder fails to comply with certain
identification requirements, or has previously failed to report
in full dividend and interest income, or does not otherwise
establish its entitlement to an exemption. Any withheld amounts
will be allowed as a refund or a credit against the United States
Holder's United States federal income tax liability; provided,
however, that certain required information is provided to the
Internal Revenue Service.
PLAN OF DISTRIBUTION
Except as described below, a broker-dealer may not participate
in the Exchange Offer in connection with a distribution of the
New Notes. Each broker-dealer that receives New Notes for its
own account pursuant to the Exchange Offer must acknowledge that
it will deliver a prospectus in connection with any resale of
such New Notes. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old
Notes where such Old Notes were acquired as a result of
market-making activities or other trading activities. The
Company has agreed that for a period not to exceed 90 days, it
will make this Prospectus, as amended or supplemented, available
to any broker-dealer for use in connection with any such resale.
In addition, until , 1998 all dealers effecting
------------ ---
transactions in the New Notes may be required to deliver a
prospectus.
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The Company will not receive any proceeds from the Exchange
Offer or any sale of New Notes by broker-dealers. New Notes
received by broker-dealers for their own account pursuant to the
Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Notes or
a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions
or concessions from any such broker-dealer and/or the purchasers
of any such New Notes. Any broker-dealer that resells New Notes
that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a
distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any
profit on any such resale of New Notes and any commissions or
concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. Any broker
or dealer registered under the Exchange Act who holds Old Notes
that are Registrable Securities and that were acquired for its
own account as a result of market-making activities or other
trading activities (other than Registrable Securities acquired
directly from the Company) may exchange such Old Notes pursuant
to the Exchange Offer; however, such broker or dealer may be
deemed to be an "underwriter" within the meaning of the
Securities Act and must, therefore, deliver a prospectus meeting
the requirements of the Securities Act in connection with any
resales of the New Notes received by such broker or dealer in the
Exchange Offer, which prospectus delivery requirement may be
satisfied by the delivery by such broker or dealer of this
Prospectus. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
The Company has agreed to pay the expenses of registration of
the New Notes and will indemnify the Holders of the New Notes
(including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
Prior to the Exchange Offer, there has been no public market
for the Old Notes. The Company does not intend to apply for
listing of the New Notes on any securities exchange or for
inclusion of such securities in any automated quotation system.
There can be no assurance that an active market for the New Notes
will develop. To the extent that a market for the New Notes does
develop, the market value of the New Notes will depend on market
conditions (including yields on alternative investments), general
economic conditions, the Company's financial condition and other
conditions. Such conditions might cause the New Notes, to the
extent that they are actively traded, to trade at a significant
discount from face value. The Company has not entered into any
arrangement or understanding with any person to distribute the
New Notes to be received in the Exchange Offer.
The Company has not agreed to compensate broker-dealers who
effect the exchange of Old Notes on behalf of Holders.
EXPERTS
The consolidated financial statements included in the 1997 10-
K, incorporated herein by reference, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
report included in the 1997 10-K, and have been incorporated by
reference herein in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
With respect to the unaudited condensed consolidated interim
financial information included in the Company's Quarterly Reports
on Form 10-Q that will be incorporated herein by reference,
Deloitte & Touche LLP will have applied limited procedures in
accordance with professional standards for reviews of such
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information. Deloitte & Touche LLP will state in their reports
included in any such Quarterly Reports on Form 10-Q that they
have not audited and they will not express an opinion on such
interim financial information. Accordingly, the degree of
reliance on any of its reports on such information should be
restricted in light of the limited nature of the review
procedures applied. Deloitte & Touche LLP is not subject to the
liability provisions of Section 11 of the Securities Act, for
their reports on such unaudited interim financial information
because such reports are not "reports" or a "part" of the
Registration Statement filed under the Act with respect to the
Common Stock offered hereby (Registration Statement), that were
prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securities Act.
LEGAL MATTERS
The statements made as to matters of law and legal conclusions
in the 1997 10-K under Part I, Item 1 -- Business-Regulation and
Rates, and Environmental Matters, incorporated herein by
reference, have been reviewed by Worsham, Forsythe & Wooldridge,
L.L.P., Dallas, Texas, General Counsel for the Company. All of
such statements are set forth, or have been incorporated by
reference, herein in reliance upon the opinion of that firm given
upon their authority as experts. At , 1998, members
-----------
of the firm of Worsham, Forsythe & Wooldridge, L.L.P., owned
approximately shares of the Common Stock of the Company.
------
The statements made as to matters of law and legal conclusions in
this Prospectus under CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES have been reviewed by Reid & Priest LLP, New York,
New York, and are set forth herein in reliance upon the opinion
of that firm given upon their authority as experts.
The validity of the New Notes is being passed upon for the
Company by Worsham, Forsythe & Wooldridge, L.L.P. and by Reid &
Priest LLP. However, all matters pertaining to incorporation of
the Company and all other matters of Texas law relating to the
Company will be passed upon only by Worsham, Forsythe &
Wooldridge, L.L.P.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IX of the Restated Articles of Incorporation of the
Company provides as follows:
"The Corporation shall reimburse or indemnify any former,
present or future director, officer or employee of the
Corporation, or any person who may have served at its request
as a director, officer or employee of another corporation, or
any former, present or future director, officer or employee of
the Corporation who shall have served or shall be serving as
an administrator, agent or fiduciary for the Corporation or
for another corporation at the request of the Corporation (and
his heirs, executors and administrators) from and against all
expenses and liabilities incurred by him or them, or imposed
on him or them, including, but not limited to, judgments,
settlements, court costs and attorneys' fees, in connection
with, or arising out of, the defense of any action, suit or
proceeding in which he may be involved by reason of his being
or having been such director, officer or employee, except with
respect to matters as to which he shall be adjudged in such
action, suit or proceeding to be liable because he did not act
in good faith, or because of dishonesty or conflict of
interest in the performance of his duty.
"No former, present or future director, officer or employee
of the Corporation (or his heirs, executors and
administrators) shall be liable for any act, omission, step or
conduct taken or had in good faith, which is required,
authorized or approved by any order or orders issued pursuant
to the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any other federal or state statute regulating
the Corporation or its subsidiaries, or any amendments to any
thereof. In any action, suit or proceeding based on any act,
omission, step or conduct, as in this paragraph described, the
provisions hereof shall be brought to the attention of the
court. In the event that the foregoing provisions of this
paragraph are found by the court not to constitute a valid
defense, each such director, officer or employee (and his
heirs, executors and administrators) shall be reimbursed for,
or indemnified against, all expenses and liabilities incurred
by him or them, or imposed on him or them, including, but not
limited to, judgments, settlements, court costs and attorneys'
fees, in connection with, or arising out of, any such action,
suit or proceeding based on any act, omission, step or conduct
taken or had in good faith as in this paragraph described.
"The foregoing rights shall not be exclusive of other rights
to which any such director, officer or employee (or his heirs,
executors and administrators) may otherwise be entitled under
any bylaw, agreement, vote of shareholders or otherwise, and
shall be available whether or not the director, officer or
employee continues to be a director, officer or employee at
the time of incurring such expenses and liabilities. In
furtherance, and not in limitation of the foregoing provisions
of this Article IX, the Corporation may indemnify and insure
any such persons to the fullest extent permitted by the Texas
Business Corporation Act, as amended from time to time, or the
laws of the State of Texas, as in effect from time to time."
Article 2.02-1 of the Texas Business Corporation Act permits
the Company, in certain circumstances, to indemnify any present
or former director, officer, employee or agent of the Company
against judgments, penalties, fines, settlements and reasonable
expenses incurred in connection with a proceeding in which any
such person was, is or is threatened to be, made a party by
reason of holding such office or position, but only to a limited
extent for obligations resulting from a proceeding in which the
person is found liable on the basis that a personal benefit was
improperly received or in circumstances in which the person is
found liable in a derivative suit brought on behalf of the
Company.
<PAGE>
Article X of the Articles of Incorporation of the Company
provides as follows:
"A director of the Corporation shall not be liable to the
Corporation or its shareholders for monetary damages for any
act or omission in the director's capacity as a director,
except that this provision does not eliminate or limit the
liability of a director to the extent the director is found
liable for:
(a) a breach of a director's duty of loyalty to the
Corporation or its shareholders;
(b) an act or omission not in good faith that constitutes
a breach of duty of a director to the Corporation or an act
or omission that involved intentional misconduct or a
knowing violation of the law;
(c) a transaction from which a director received an
improper benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office;
or
(d) an act or omission for which the liability of a
director is expressly provided for by statute.
If the laws of the State of Texas are amended to authorize
action further eliminating or limiting the personal liability
of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest
extent permitted by such laws as so amended. Any repeal or
modification of this Article X shall not adversely affect any
right of protection of a director of the Corporation existing
at the time of such repeal or modification."
Section 22 of the Company's bylaws provides as follows:
"Section 22. Insurance, Indemnification and Other
Arrangements. Without further specific approval of the
shareholders of the Corporation, the Corporation may purchase,
enter into, maintain or provide insurance, indemnification or
other arrangements for the benefit of any person who is or was
a director, officer, employee or agent of the Corporation or
is or was serving another entity at the request of the
Corporation as a director, officer, employee, agent or
otherwise, to the fullest extent permitted by the laws of the
State of Texas, including without limitation Art. 2.02-1 of
the Texas Business Corporation Act or any successor provision,
against any liability asserted against or incurred by any such
person in any such capacity or arising out of such person's
service in such capacity whether or not the Corporation would
otherwise have the power to indemnify against any such
liability under the Texas Business Corporation Act. If the
laws of the State of Texas are amended to authorize the
purchase, entering into, maintaining or providing of
insurance, indemnification or other arrangements in the nature
of those permitted hereby to a greater extent than presently
permitted, then the Corporation shall have the power and
authority to purchase, enter into, maintain and provide any
additional arrangements in such regard as shall be permitted
from time to time by the laws of the State of Texas without
further approval of the shareholders of the Corporation. No
repeal or modification of such laws or this Section 22 shall
adversely affect any such arrangement or right to
indemnification existing at the time of such repeal or
modification."
The Registrant has entered into agreements with its directors
which provide, among other things, for their indemnification by
the Registrant to the fullest extent permitted by Texas law,
unless a final adjudication establishes that the indemnitee's
acts were committed in bad faith, were the result of active and
deliberate dishonesty or that the indemnitee personally gained a
financial profit to which the indemnitee was not legally
entitled. These agreements further provide, under certain
circumstances, for the advancement of expenses and the
implementation of other arrangements for the benefit of the
indemnitee.
II-2
<PAGE>
The Registrant has insurance covering its expenditures which
might arise in connection with its lawful indemnification of its
directors and officers for their liabilities and expenses.
Directors and officers of the Company also have insurance which
insures them against certain other liabilities and expenses.
II-3
<PAGE>
ITEM 21. EXHIBITS.
PREVIOUSLY FILED*
----------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
------- ------- -------
3(a) 333- 3(a) -- Restated Articles of
12391 Incorporation of the
Company
3(b) 333- 4(b) -- Bylaws of the Company, as
45657 amended.
4(a) 1- 4(ff) -- Indenture relating to Series C
12833 and Series C Exchange
Form Notes.
10-K
(1997)
4(b) 1- 4(gg) -- Registration Rights Agreement
12833 with respect to Series C
Form Notes.
10-K
(1997)
4(c) 1- 4(hh) -- Officers' Certificate
12833 establishing
Form Series C
10-K Exchange Notes.
(1997)
4(d) -- Form of Series C Exchange
Notes.
4(e) -- Form of Letter of Transmittal
5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) -- Opinion of Reid & Priest LLP,
and of counsel to the Company.
8
12 1- 12(a) -- Computation of Ratio of
12833 Earnings to Fixed Charges of
Form the Company.
10-K
(1997)
23(a) -- Independent Auditors' Consent.
23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 8 and 5(b),
respectively.
24 -- Power of Attorney (see Page II-7).
25(a) -- Statement on Form T-1 of the
Bank of New York relating to
Indenture for the Series C
Exchange Notes.
99(a) -- Form of Exchange Agent
Agreement.
-------------------------
*Incorporated herein by reference.
II-4
<PAGE>
ITEM 22. UNDERTAKINGS.
a. The undersigned registrant hereby undertakes:
(1) To file, during any 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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act of 1933 if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the
effective 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;
(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.
(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.
(4) 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 Exchange
Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
b. That, 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 provisions described under Item 20 above, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission 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.
c. (i) To respond to requests for information that is
incorporated by reference into the prospectus pursuant to Items
4, 10(b), 11, or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means; and (ii) to
arrange to provide for a facility in the U.S. for the purpose of
responding to such requests. The undertaking in subparagraph (i)
above includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
II-5
<PAGE>
d. To supply by means of a post-effective amendment all
information concerning a transaction and the company being
acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-6
<PAGE>
POWER OF ATTORNEY
EACH DIRECTOR AND/OR OFFICER OF THE REGISTRANT WHOSE
SIGNATURE APPEARS BELOW HEREBY APPOINTS THE AGENTS FOR SERVICE
NAMED IN THIS REGISTRATION STATEMENT, AND EACH OF THEM SEVERALLY,
AS HIS ATTORNEY-IN-FACT TO SIGN IN HIS NAME AND BEHALF, IN ANY
AND ALL CAPACITIES STATED BELOW, AND TO FILE WITH THE SECURITIES
AND EXCHANGE COMMISSION, ANY AND ALL AMENDMENTS, INCLUDING POST-
EFFECTIVE AMENDMENTS, TO THIS REGISTRATION STATEMENT, AND THE
REGISTRANT HEREBY ALSO APPOINTS EACH SUCH AGENT FOR SERVICE AS
ITS ATTORNEY-IN-FACT WITH LIKE AUTHORITY TO SIGN AND FILE ANY
SUCH AMENDMENTS IN ITS NAME AND BEHALF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
AS AMENDED, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF DALLAS, AND STATE OF TEXAS.
TEXAS UTILITIES COMPANY
BY /S/ ERLE NYE
--------------------
(ERLE NYE, CHAIRMAN
OF THE BOARD AND
CHIEF EXECUTIVE)
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURES TITLE DATE
---------- ----- ----
/S/ ERLE NYE PRINCIPAL
-------------------------------- EXECUTIVE
(ERLE NYE, CHAIRMAN OF THE BOARD OFFICER AND
AND CHIEF EXECUTIVE) DIRECTOR
/S/ MICHAEL J. MCNALLY PRINCIPAL
-------------------------------- FINANCIAL
(MICHAEL J. MCNALLY, EXECUTIVE OFFICER
VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER)
/S/ JERRY W. PINKERTON PRINCIPAL
-------------------------------- ACCOUNTING
(JERRY W. PINKERTON, CONTROLLER) OFFICER
/S/ J. S. FARRINGTON DIRECTOR
--------------------------------
(J. S. FARRINGTON)
/S/ BAYARD H. FRIEDMAN DIRECTOR
--------------------------------
(BAYARD H. FRIEDMAN)
/S/ WILLIAM M. GRIFFIN DIRECTOR APRIL 3, 1998
--------------------------------
(WILLIAM M. GRIFFIN)
/S/ KERNEY LADAY DIRECTOR
----------------------------------
(KERNEY LADAY)
/S/ MARGARET N. MAXEY DIRECTOR
----------------------------------
(MARGARET N. MAXEY)
/S/ JAMES A. MIDDLETON DIRECTOR
----------------------------------
(JAMES A. MIDDLETON)
/S/ JAMES E. OESTERRICHER
---------------------------------- DIRECTOR
(JAMES E. OESTERRICHER)
/S/ CHARLES R. PERRY DIRECTOR
----------------------------------
(CHARLES R. PERRY)
DIRECTOR
----------------------------------
(HERBERT H. RICHARDSON)
II-7
<PAGE>
EXHIBIT INDEX
PREVIOUSLY FILED*
--------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
------- ------ -------
3(a) 333-12391 3(a) -- Restated Articles of
Incorporation of the Company
3(b) 333-45657 4(b) -- Bylaws of the Company, as
amended.
4(a) 1-12833 4(ff) -- Indenture relating to Series C
Form 10-K and Series C Exchange Notes.
(1997)
4(b) 1-12833 4(gg) -- Registration Rights Agreement
Form 10-K with respect to Series C Notes.
(1997)
4(c) 1-12833 4(hh) -- Officers' Certificate
Form 10-K establishing Series C Exchange
(1997) Notes.
4(d) -- Form of Series C Exchange
Notes.
4(e) -- Form of Letter of Transmittal
5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General
Counsel for the Company.
5(b) and 8 -- Opinion of Reid & Priest LLP,
of counsel to the Company.
12 1-12833 12(a) -- Computation of Ratio of
Form 10-K Earnings to Fixed Charges of
(1997) the Company.
23(a) -- Independent Auditors' Consent.
23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P. and Reid &
Priest LLP are contained in
Exhibits 5(a) and 8 and 5(b),
respectively.
24 -- Power of Attorney (see Page II-7).
25(a) -- Statement on Form T-1 of the
Bank of New York relating to
Indenture for the Series C
Exchange Notes.
99(a) -- Form of Exchange Agent
Agreement.
-----------------------------------
*Incorporated herein by reference.
[depository legend]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
NO._______________ CUSIP NO.__________
[FACE OF EXCHANGE SENIOR NOTE]
TEXAS UTILITIES COMPANY
6.375% SERIES C EXCHANGE SENIOR NOTES DUE 2008
TEXAS UTILITIES COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (herein referred to
as the "Company", which term includes any successor Person under
the Indenture), for value received, hereby promises to pay to
or registered assigns, the principal sum of
--------------------
Dollars on January 1, 2008, and to pay interest on said principal
sum semi-annually on January 1 and July 1 of each year (each an
Interest Payment Date) at the rate of 6.375% per annum until the
principal hereof is paid or made available for payment. Interest
on the Securities of this series will accrue from ,
--------------
to the first Interest Payment Date, and thereafter will accrue
from the last Interest Payment Date to which interest has been
paid or duly provided for. In the event that any Interest Payment
Date is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of such delay) with the same force and effect as if made
on the Interest Payment Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the 15th
day of the calendar month next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES COMPANY
By:_______________________________
ATTEST:
____________________________
<PAGE>
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:_____________________________
Authorized Signatory
<PAGE>
[REVERSE OF EXCHANGE SENIOR NOTE]
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an Indenture
(for Unsecured Debt Securities Series C), dated as of January 1,
1998 (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in
such instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby
made to the Indenture, including the Board Resolutions and
Officer's Certificate filed with the Trustee on January 13, 1998
creating the series designated on the face hereof, for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $200,000,000.
REDEMPTION
The Securities of this series will not be redeemable
prior to maturity.
The Indenture contains provisions for defeasance at any
time of the entire indebtedness of this Security upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of all series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right
to institute any proceeding with respect to the Indenture or for
the appointment of a receiver or trustee or for any other remedy
thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of a
majority in aggregate principal amount of the Securities of all
series at the time Outstanding in respect of which an Event of
Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be
continuing a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in
registered form without coupons in denominations of $5,000 and in
integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of
like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, the obligations
of the Company under the Securities of this series and the
Indenture to the extent related to such series may be assigned by
the Company to, and be assumed in whole, on a full recourse
basis, by a wholly owned Subsidiary of the Company at any time;
provided, however, that such assumption shall be subject to, and
-------- -------
permitted only upon the fulfillment and satisfaction of, the
following terms and conditions: (a) an assumption agreement and
a supplemental indenture to the Indenture evidencing such
assumption shall be in substance and form reasonably satisfactory
to the Trustee and shall, inter alia, include modifications and
----- ----
amendments to the Indenture making the obligations under the
Securities of this series and under the Indenture to the extent
related to such series primary obligations of such Subsidiary,
substituting such Subsidiary of the Company for the Company in
the form of the Securities of this series and in provisions of
the Indenture to the extent related to such series and releasing
and discharging the Company from its obligations under the
Securities of this series and the Indenture to the extent related
to such series; and (b) the Trustee shall have received (i) an
executed counterpart of such assumption agreement and
supplemental indenture; (ii) evidence satisfactory to the Trustee
and the Company that all necessary authorizations, consents,
orders, approvals, waivers, filings and declarations of or with,
Federal, state, county, municipal, regional or other governmental
authorities, agencies or boards (collectively, "Governmental
Actions") relating to such assumption have been duly obtained and
are in full force and effect, (iii) evidence satisfactory to the
Trustee that any security interest intended to be created by the
Indenture is not in any material way adversely affected or
impaired by any of the agreements or transactions relating to
such assumption and (iv) an Opinion of Counsel for such
Subsidiary, reasonably satisfactory in substance, scope and form
to the Trustee and the Company, to the effect that (A) the
supplemental indenture evidencing such assumption has been duly
authorized, executed and delivered by such Subsidiary, (B) the
execution and delivery by such Subsidiary of such supplemental
indenture and the consummation of the transactions contemplated
thereby do not contravene any provision of law or any
governmental rule applicable to such Subsidiary or any provision
of such Subsidiary's charter documents or by-laws and do not
contravene any provision of, or constitute a default under, or
result in the creation or imposition of any lien upon any of such
Subsidiary's properties or assets under any indenture, mortgage,
contract or other agreement to which such Subsidiary is a party
or by which such Subsidiary or any of its properties may be bound
or affected, (C) all necessary Governmental Actions relating to
such assumption have been duly obtained and are in full force and
effect and (D) such agreement and supplemental indenture
constitute the legal, valid and binding obligations of such
Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws at the time in effect affecting the rights of
creditors generally.
At the time of such assumption the Company will
unconditionally guarantee payment of the Securities of this
series and will execute a guarantee in form and substance
satisfactory to the Trustee. Pursuant to the guarantee, the
Company will fully and unconditionally guarantee the payment of
the obligations of such assuming Subsidiary under the Securities
of this series and under the Indenture, including, without
limitation, payment, as and when due, of the principal of,
premium, if any, and interest on, the Securities of this series.
Other than the obligation to make such payments, the Company
shall be released and discharged from all other obligations under
the Indenture.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
FOR VALUE RECEIVED, the undersigned sells, assigns
and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________
Name and address of assignee must be printed or typewritten.
the within Security of the Company and does hereby irrevocable
constitute and appoint
to transfer the said Security on the books of the within-named
Company, with full power of substitution in the premises.
Dated:
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE ANY OR ALL OF ITS
6.375% SERIES C SENIOR NOTES DUE 2008
FOR
6.375% SERIES C EXCHANGE SENIOR NOTES DUE 2008
OF
TEXAS UTILITIES COMPANY
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON ________, 1998 UNLESS EXTENDED (THE "EXPIRATION
DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE.
Deliver To:
The Bank of New York, Exchange Agent
By Registered or Certified By Facsimile: By Hand or Overnight
Mail: (Eligible Courier:
The Bank of New York Institutions The Bank of New York
101 Barclay Street, 7E Only) 101 Barclay Street
New York, New York 10286 (212) 815-6339 Corporate Trust
Attention: Reorganization Services Window
Section, Confirm by Ground Level
Theresa Gass Telephone: Attention:
(212) 815-5942 Reorganization
Section,
Theresa Gass
Delivery of this instrument to an address other than as set forth
above or transmission of instructions via a facsimile number
other than the one listed above will not constitute a valid
delivery. The instructions accompanying this Letter of
Transmittal should be read carefully before this Letter of
Transmittal is completed.
The undersigned acknowledges that he or she has received and
reviewed the Prospectus dated _____, 1998 (the "Prospectus") of
TEXAS UTILITIES COMPANY (the "Issuer") and this Letter of
Transmittal (the "Letter of Transmittal"), which together
constitute the Issuer's offer to exchange (the "Exchange Offer")
any and all of its outstanding 6.375% Series C Senior Notes due
2008 ("Old Notes") for an equal principal amount of its 6.375%
Series C Exchange Senior Notes due 2008 ("New Notes"). The New
Notes have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration
Statement of which the Prospectus is a part. Old Notes may be
tendered only in the principal amount of $5,000 and integral
multiples of $1,000 in excess thereof. Other capitalized terms
used but not defined herein have the meanings given to them in
the Prospectus.
This Letter of Transmittal is to be completed by a holder of
Old Notes either (i) if certificates for Old Notes are to be
forwarded herewith or (ii) unless an Agent's Message (as defined
below) is utilized, if tenders of Old Notes are to be made by
book-entry transfer into the account of The Bank of New York, as
Exchange Agent (the "Exchange Agent"), at the Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in "The Exchange Offer Book-Entry Transfer"
section of the Prospectus. Holders of Old Notes whose
certificates are not immediately available, or who are unable to
deliver their certificates or confirmation of the book-entry
tender of their Old Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility (a "Book-Entry Confirmation")
and all other documents required by this Letter of Transmittal to
<PAGE>
the Exchange Agent on or prior to the Expiration Date, must
tender their Old Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer Guaranteed Delivery
Procedures" section of the Prospectus. See Instruction 1.
Delivery of documents to the Book-Entry Transfer Facility does
not constitute delivery to the Exchange Agent.
The term "Agent's Message" means a message, transmitted by
the Book-Entry Transfer Facility and received by the Exchange
Agent and forming a part of a Book Entry Confirmation, which
states that such Book-Entry Transfer Facility has received an
express acknowledgment from the participant in such Book-Entry
Facility tendering the Old Notes which are the subject of such
Book-Entry Confirmation that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and
that the Company may enforce such agreement against such
participant. The term "Holder" with respect to the Exchange
Offer means (i) any person who is the beneficial owner of Senior
Notes held of record by DTC, (ii) any person in whose name Senior
Notes are registered on the Company's books or (iii) any other
person who has obtained a properly completed assignment from a
registered Holder. The undersigned has completed, executed and
delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Holders who wish to tender their Old Notes must complete this
letter in its entirety.
-2-
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE
COMPLETING THESE BOXES
------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES
------------------------------------------------------------------------
PRINCIPAL
AMOUNT
TENDERED
(MUST BE IN THE
AMOUNT OF $5,000 OR
NAMES AND ADDRESS(ES) OF AGGREGATE MULTIPLES OF
HOLDER(S) CERTIFICATE PRINCIPAL $1,000 IN EXCESS
(PLEASE FILL IN, IF BLANK) NUMBER(S)* AMOUNT THEREOF)**
------------------------------------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
TOTAL
------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
** Unless indicated in the column labeled "Principal Amount Tendered,"
any tendering Holder of Old Notes will be deemed to have tendered
the entire aggregate principal amount represented by the column
labeled "Aggregate Principal Amount."
If the space provided above is inadequate, list the certificate
numbers and principal amounts on a separate signed schedule and
affix the list to this Letter of Transmittal.
The minimum permitted tender is $5,000 in principal amount of Old
Notes due. All other tenders must be in integral multiples of
$1,000 in excess of $5,000.
------------------------------------------------------------------------
[ ] CHECK HERE IF CERTIFICATED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS (AS
HEREINAFTER DEFINED) ONLY):
Name of Tendering Institution
------------------------------------------
DTC Book-Entry Account Number
------------------------------------------
Transaction Code Number
-------------------------------------------------
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING (FOR
USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Old Noteholder(s)
-------------------------------
Date of Execution of Notice of Guaranteed Delivery
----------------------
Window Ticket Number (if available)
-------------------------------------
Name of Institution which Guaranteed Delivery
---------------------------
Account Number (if delivered by book-entry transfer)
--------------------
-3-
<PAGE>
----------------------------------- -----------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6) (See Instructions 4, 5 and 6)
To be completed ONLY (i) if To be completed ONLY if
certificates for Old Notes not certificates for Old Notes not
exchanged, or New Notes issued in exchanged, or New Notes issued in
exchange for Old Notes accepted exchange for Old Notes accepted
for exchange, are to be issued in for exchange, are to be sent to
the name of someone other than someone other than the
the undersigned, or (ii) if Old undersigned, or to the
Notes tendered by book-entry undersigned at an address other
transfer which are not exchanged than that shown above.
are to be returned by credit to
an account maintained at Mail to:
Depository Trust Company ("DTC")
other than the account from which Name
they were tendered. -----------------------------
(Please Print)
Issue certificate(s) in the name Address
of: --------------------------
Name ---------------------------------
---------------------------- (Include Zip Code)
(Please Print)
---------------------------------
Address (Tax Identification
-------------------------- or Social Security No.)
---------------------------------
(Include Zip Code)
---------------------------------
(Tax Identification or
Social Security No.)
Credit Old Notes not exchanged
and delivered by book-entry
transfer to the DTC account set
forth below:
------------------------
DTC Account Number
--------------------------------- ----------------------------------
-4-
<PAGE>
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the
undersigned hereby tenders to the Issuer the principal amount of Old Notes
indicated above. Subject to and effective upon the acceptance for exchange
of the principal amount of Old Notes tendered in accordance with this
Letter of Transmittal, the undersigned sells, assigns and transfers to, or
upon the order of, the Issuer all right, title and interest in and to the
Old Notes tendered hereby. The undersigned hereby irrevocably constitutes
and appoints the Exchange Agent its agent and attorney-in-fact (with full
knowledge that the Exchange Agent also acts as the agent of the Issuer)
with respect to the tendered Old Notes with full power of substitution to
(i) deliver certificates for such Old Notes, or transfer ownership of such
Old Notes on the account books maintained by DTC, to the Issuer and deliver
all accompanying evidences of transfer and authenticity to, or upon the
order of, the Issuer and (ii) present such Old Notes for transfer on the
books of the Issuer and receive all benefits and otherwise exercise all
rights of beneficial ownership of such Old Notes, all in accordance with
the terms of the Exchange Offer. The power of attorney granted in this
paragraph shall be deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he or she has full
power and authority to tender, sell, assign and transfer the Old Notes
tendered hereby and that the Issuer will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim, when the same are
acquired by the Issuer. The undersigned hereby further represents that (i)
any New Notes acquired in exchange for Old Notes tendered hereby will have
been acquired in the ordinary course of business of the person receiving
such New Notes, whether or not the undersigned, (ii) neither the
undersigned nor any such other person is engaging in or intends to engage
in a distribution of the New Notes, (iii) neither the Holder nor any such
other person has an arrangement or understanding with any person to
participate in the distribution of such New Notes and (iv) neither the
Holder nor any such other person is an "affiliate," as defined in Rule 405
under the Securities Act, of the Issuer.
The undersigned also acknowledges that this Exchange Offer is being
made in reliance upon interpretations contained in letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC")
that the New Notes issued in exchange for the Old Notes pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred
by Holders thereof (other than any such Holder that is an "affiliate" of
the Issuer within the meaning of Rule 405 under the Securities Act),
without compliance with the registration and prospectus delivery provisions
of the Securities Act, provided that such New Notes are acquired in the
ordinary course of such Holders' business and such Holders are not engaging
in and do not intend to engage in a distribution of the New Notes and have
no arrangement or understanding with any person to participate in a
distribution of such New Notes. If the undersigned is not a broker-dealer,
the undersigned represents that it is not engaged in, and does not intend
to engage in, a distribution of New Notes. If the undersigned is a broker-
dealer that will receive New Notes for its own account in exchange for Old
Notes that were acquired as a result of market-making activities or other
trading activities, it acknowledges that it will deliver a prospectus in
connection with any resale of such New Notes; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the assignment, transfer and purchase of the Old
Notes tendered hereby.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the certificates representing the New Notes issued in exchange
for certificated Old Notes accepted for exchange and return any
certificated Old Notes not tendered or not exchanged, in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please send the certificates representing the New Notes
issued in exchange for the certificated Old Notes accepted for exchange and
any certificates for Old Notes not tendered or not exchanged (and
accompanying documents, as appropriate) to the undersigned at the address
shown below the undersigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the certificates representing the New Notes issued
in exchange for the certificated Old Notes accepted for exchange in the
name(s) of, and return any certificated Old Notes not tendered or not
exchanged and send said certificates to, the person(s) so indicated. The
undersigned recognizes that the Issuer has no obligation pursuant to the
"Special Payment Instructions" and "Special Delivery Instructions" to
-5-
<PAGE>
transfer any Old Notes from the name of the registered Holder(s) thereof if
the Issuer does not accept for exchange any of the Old Notes so tendered.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned acknowledges that for purposes of the Exchange Offer,
the Issuer shall be deemed to have accepted validly tendered Old Notes
when, as and if the Issuer has given oral or written notice thereof to the
Exchange Agent.
If any Old Notes tendered in certificated form are not accepted for
exchange pursuant to the Exchange Offer for any reason, certificates for
any such unaccepted Old Notes will be returned, without expense, to the
undersigned at the address shown below or at a different address as may be
indicated herein under "Special Delivery Instructions" as promptly as
practicable after the Expiration Date. If any Old Notes tendered in book-
entry form are not accepted for exchange pursuant to the Exchange Offer for
any reason, such unaccepted Old Notes will be returned by credit to the
tendering account or to a different account as may be indicated herein
under "Special Issuance Instructions" as promptly as practicable after the
Expiration Date.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption THE EXCHANGE OFFER--"Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute
a binding agreement between the undersigned and the Issuer upon the terms
and subject to the conditions of the Exchange Offer.
Holders of Old Notes in certificated form who wish to tender their Old
Notes and (i) whose Old Notes are not immediately available, or (ii) who
cannot deliver their Old Notes, this Letter of Transmittal or any other
documents required hereby to the Exchange Agent prior to the Expiration
Date (or who cannot comply with the book-entry transfer procedure on a
timely basis), may tender their Old Notes according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The
Exchange Offer--Guaranteed Delivery Procedures." See Instruction 1
regarding the completion of this Letter of Transmittal, printed below.
-6-
<PAGE>
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
X
--------------------------------------------- --------------
Date
X
--------------------------------------------- --------------
Signature(s) of Holder(s) Date
or Authorized Signatory
Area Code and Telephone Number:
------------
The above lines must be signed by the beneficial owners of the Old
Notes or, in the case of certificated Old Notes, by the registered
Holder(s) of Old Notes as their name(s) appear(s) on the Old Notes or by
person(s) authorized to become registered Holder(s) by a properly completed
assignment from the registered Holder(s), a copy of which must be
transmitted with this Letter of Transmittal. If Old Notes to which this
Letter of Transmittal relate are held of record by two or more joint
Holders, then all such Holders must sign this Letter of Transmittal. If
signature is by trustee, executor, administrator, guardian, attorney-in-
fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, then such person must (i) set forth his or her
full title below and (ii) unless waived by the Issuer, submit evidence
satisfactory to the Issuer of such person's authority so to act. See
Instruction 4 regarding the completion of this Letter of Transmittal,
printed below.
Name(s):
------------------------------------------------------------------
---------------------------------------------------------------------------
(Please Print)
Capacity:
-----------------------------------------------------------------
Address:
-----------------------------------------------------------------
-----------------------------------------------------------------
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution (as
hereinafter defined):
(If required by Instruction 4)
-----------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signatures)
By
-----------------------------------------------------------
(Authorized Signature)
-----------------------------------------------------------
(Printed Name)
-----------------------------------------------------------
(Title)
Dated: , 1998
------------------
-7-
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. The
tendered Old Notes or any confirmation of a book-entry transfer (a "Book-
Entry Confirmation"), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof and any other
documents required by this Letter of Transmittal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the Expiration Date. The method of delivery of the tendered
Old Notes, this Letter of Transmittal and all other required documents to
the Exchange Agent is at the election and risk of the Holder and, except as
otherwise provided below, the delivery will be deemed made only when
actually received or confirmed by the Exchange Agent. Instead of delivery
by mail, it is recommended that the Holder use an overnight or hand
delivery service. In all cases, sufficient time should be allowed to
assure delivery to the Exchange Agent before the Expiration Date. No
Letter of Transmittal or Old Notes should be sent to the Issuer.
Holders of Old Notes in certificated form who wish to tender their Old
Notes and (i) whose Old Notes are not immediately available, or (ii) who
cannot deliver their Old Notes, this Letter of Transmittal or any other
documents required hereby to the Exchange Agent prior to the Expiration
Date or (iii) who are unable to complete the procedure for book-entry
transfer on a timely basis, must tender their Old Notes according to the
guaranteed delivery procedures set forth below. Pursuant to such
procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) prior to the Expiration Date, the Exchange Agent must
have received from the Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery (by facsimile transmission, mail or
hand delivery) setting forth the name and address of the Holder of the Old
Notes, the certificate number or numbers of such Old Notes and the
principal amount of Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that, within five New York Stock Exchange
trading days after the Expiration Date, this Letter of Transmittal (or
facsimile hereof) together with the certificate(s) representing the Old
Notes (or a Book-Entry Confirmation) and any other required documents will
be deposited by the Eligible Institution (as hereinafter defined) with the
Exchange Agent; and (iii) such properly completed and executed Letter of
Transmittal (or facsimile hereof), as well as all other documents required
by this Letter of Transmittal and the certificates(s) representing all
tendered Old Notes (or a Book-Entry Confirmation) in proper form for
transfer, must be received by the Exchange Agent within five New York Stock
Exchange trading days after the Expiration Date, all as provided in the
Prospectus under the caption "The Exchange Offer Guaranteed Delivery
Procedures." Any Holder of Old Notes who wishes to tender his Old Notes
pursuant to the guaranteed delivery procedures described above must ensure
that the Exchange Agent receives the Notice of Guaranteed Delivery prior to
5:00 p.m., New York City time, on the Expiration Date. Upon request of the
Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who
wish to tender their Old Notes according to the guaranteed delivery
procedures set forth above.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old
Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute
right to reject any and all Old Notes of either series not properly
tendered or any Old Notes the Issuer's acceptance of which would, in the
opinion of counsel for the Issuer, be unlawful. The Issuer also reserves
the right to waive any irregularities or conditions of tender as to
particular Old Notes. The Issuer's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in this Letter
of Transmittal) shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Old Notes must
be cured within such time as the Issuer shall determine. Neither the
Issuer, the Exchange Agent nor any other person shall be under any duty to
give notification of defects or irregularities with respect to tenders of
Old Notes, nor shall any of them incur any liability for failure to give
such notification. Tenders of Old Notes will not be deemed to have been
made until such defects or irregularities have been cured or waived. Any
Old Notes received by the Exchange Agent that are not properly tendered and
as to which the defects or irregularities have not been cured or waived
will be returned by the Exchange Agent to the tendering Holders of Old
Notes, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date.
2. TENDER BY HOLDER. Any beneficial owner of Old Notes who is not
the registered Holder and who wishes to tender should (i) execute and
deliver this Letter of Transmittal and instruct his or her securities
-8-
<PAGE>
intermediary to tender his Old Notes for exchange or (ii) if such Old Notes
are in certificated form, prior to completing and executing this Letter of
Transmittal and delivering his Old Notes, either make appropriate
arrangements to register ownership of the Old Notes in such Holder's name
or obtain a properly completed assignment from the registered Holder.
3. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in
the principal amount of $5,000 and integral multiples of $1,000. If less
than the entire principal amount of any Old Notes is tendered, the
tendering Holder should fill in the principal amount tendered in the third
column of the box entitled "Description of Old Notes" above. The entire
principal amount of certificated Old Notes delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated. If the
entire principal amount of any certificated Old Note is not tendered, then
a certificate for the principal amount not tendered and a certificate or
certificates representing New Notes issued in exchange for any Old Notes
accepted will be sent to the Holder at his or her registered address,
unless a different address is provided in the appropriate box on this
Letter of Transmittal, promptly after the Old Notes are accepted for
exchange.
4. SIGNATURES ON THE LETTER OF TRANSMITTAL; ASSIGNMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or
facsimile hereof) is signed by the record Holder(s) of the Old Notes
tendered hereby, the signature must correspond with the name(s) as written
on the face of the Old Notes without alteration, enlargement or any change
whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders of Old Notes tendered and the certificate or
certificates for New Notes issued in exchange therefor is to be issued (or
any untendered principal amount of Old Notes is to be reissued) to the
registered Holder, the said Holder need not and should not endorse any
tendered Old Notes, nor provide a separate assignment. In any other case,
such Holder must either properly endorse the Old Notes tendered or transmit
a properly completed separate assignment with this Letter of Transmittal,
with the signatures on the endorsement or assignment guaranteed by an
Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a
person other than the registered Holder or Holders of any certificated Old
Notes listed, such Old Notes must be endorsed or accompanied by appropriate
assignments, in each case signed as the name of the registered Holder or
Holders appears on the Old Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes
or assignments are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, or officers of corporations or others acting
in a fiduciary or representative capacity, such persons should so indicate
when signing, and, unless waived by the Issuers, evidence satisfactory to
the Issuers of their authority so to act must be submitted with this Letter
of Transmittal.
Endorsements on certificated Old Notes or signatures on assignments
required by this Instruction 4 must be guaranteed by an Eligible
Institution.
Except as otherwise provided below, all signatures on this Letter of
Transmittal must be guaranteed by a a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or correspondent
in the United States or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934 (an
"Eligible Institution"). Signatures on this Letter of Transmittal need not
be guaranteed if (a) this Letter of Transmittal is signed by the registered
Holder(s) of the Old Notes tendered herewith and such Holder(s) have not
completed the box set forth herein entitled "Special Payment Instructions"
or the box entitled "Special Delivery Instructions," or (b) if such Old
Notes are tendered for the account of an Eligible Institution.
5. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. Tendering Holders of
certificated Old Notes should indicate, in the applicable box or boxes, the
name and address to which New Notes or substitute Old Notes for principal
amounts not tendered or not accepted for exchange are to be issued or sent,
if different from the name and address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the taxpayer
identification or social security number of the person named must also be
indicated.
6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer.
If, however, certificates representing New Notes or Old Notes for principal
-9-
<PAGE>
amounts not tendered or accepted for exchange are to be delivered to, or
are to be registered or issued in the name of, any person other than the
registered holder of the Old Notes tendered hereby, or if tendered Old
Notes in certificated form are registered in the name of any person other
than the person signing this Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed
on the registered Holder or on any other persons) will be payable by the
tendering Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with this Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such tendering
Holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
7. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to
amend, waive or modify specified conditions in the Exchange Offer in the
case of any Old Notes tendered.
8. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering
Holder whose Old Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated herein for
further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance and requests for additional copies of the
Prospectus or this Letter of Transmittal may be directed to the Exchange
Agent at the address specified in the Prospectus. Holders may also contact
their broker, dealer, commercial bank, trust company, nominee or other
securities intermediary for assistance concerning the Exchange Offer.
10. IMPORTANT TAX INFORMATION. Holders who have not previously
furnished a taxpayer identification number to the Paying Agent for the Old
Notes, should furnish such information to the Exchange Agent on Substitute
Form W-9. A copy of such form may be obtained from the Exchange Agent.
(DO NOT WRITE IN SPACE BELOW)
=================================
CERTIFICATE OLD NOTES OLD NOTES
SURRENDERED TENDERED ACCEPTED
---------------------------------
---------------------------------
=================================
Delivery Prepared by Checked By Date
------------ ----------------- -------
-10-
<PAGE>
NOTICE OF GUARANTEED DELIVERY FOR
TEXAS UTILITIES COMPANY
This form or one substantially equivalent hereto must be used to
accept the Exchange Offer of Texas Utilities Company (the "Issuer") made
pursuant to the Prospectus, dated ______, 1998 (the "Prospectus"), if
certificates for Old Notes of the Issuer are not immediately available or
if the procedure for book-entry transfer cannot be completed on a timely
basis or time will not permit all required documents to reach the Exchange
Agent prior to 5:00 p.m., New York City time, on the Expiration Date of the
Exchange Offer. Such form may be delivered or transmitted by telegram,
facsimile transmission, mail or hand delivery to The Bank of New York (the
"Exchange Agent") as set forth below. In addition, in order to utilize the
guaranteed delivery procedure to tender Old Notes pursuant to the Exchange
Offer, a completed, signed and dated Letter of Transmittal (or a manually
signed facsimile thereof) with any required signature guarantee and any
other documents required by the Letter of Transmittal must be received by
the Exchange Agent no later than five New York Stock Exchange trading days
after the Expiration Date. Capitalized terms not defined herein are
defined in the Prospectus.
Deliver To:
The Bank of New York, Exchange Agent
By Registered or Certified By Facsimile: By Hand or Overnight
Mail: (Eligible Courier:
The Bank of New York Institutions The Bank of New York
101 Barclay Street, 7E Only) 101 Barclay Street
New York, New York 10286 (212) 815-6339 Corporate Trust
Attention: Reorganization Services Window
Section, Confirm by Ground Level
Theresa Gass Telephone: Attention:
(212) 815-5942 Reorganization
Section,
Theresa Gass
Delivery of this instrument to an address other than as set forth
above, or transmission of instructions via facsimile other than as set
forth above, will not constitute a valid delivery.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Issuer the principal amount of Old Notes set forth below, pursuant to the
guaranteed delivery procedure described in THE EXCHANGE OFFER "Guaranteed
Delivery Procedures" section of the Prospectus. By so tendering, the
undersigned hereby does make, at and as of the date hereof, the
representations and warranties of a tendering holder of Old Notes set forth
in the Letter of Transmittal.
-------------------------------- ---------------------------------
Principal Amount of Old Notes If Old Notes will be
Tendered: <*> delivered by book-entry
transfer to the Depository
$ Trust Company, provide
----------------------------- account number.
Certificate Nos. (if Account Number
available): ----------
--------------------------------
------------------------------
Total Principal Amount
Represented by Old Notes
Certificate(s):
$
-----------------------------
---------------------------------
<*> Must be in denominations of $5,000 principal amount and integral
multiples of $1,000 in excess thereof.
<PAGE>
--------------------------------------------------------------------------
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.
--------------------------------------------------------------------------
PLEASE SIGN HERE
X
---------------------------------------- ------------------------------
X
--------------------------------------- -----------------------------
Signatures of Owner(s) Date
or Authorized Signatory
Area Code and Telephone
Number:
---------------------------
Must be signed by the Holder(s) of Old Notes as their name(s)
appear(s) on certificates for Old Notes or on a security position listing,
or by person(s) authorized to become registered Holder(s) by endorsement
and documents transmitted with this Notice of Guaranteed Delivery. If
signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer or other person acting in a fiduciary or representative
capacity, such person must set forth his or her full title below.
Please print name(s) and address(es)
Name(s):
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Capacity:
-----------------------------------------------------------------
Address(es):
----------------------------------------------------------------
----------------------------------------------------------------
- 2 -
<PAGE>
GUARANTEE
The undersigned, a member of a registered national securities
exchange, or a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an officer or
correspondent in the United States, hereby guarantees that the certificates
representing the principal amount of Old Notes tendered hereby in proper
form or transfer, or timely confirmation of the book-entry transfer of such
Old Notes into the Exchange Agent's account at Depository Trust Company
pursuant to the procedures set forth in "The Exchange Offer Guaranteed
Delivery Procedures" section of the Prospectus, together with a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with any required signature guarantee and any other
documents required by the Letter of Transmittal, will be received by the
Exchange Agent at the address set forth above, no later than five New York
Stock Exchange trading days after the Expiration Date.
----------------------------- -----------------------------
Name of Firm Authorized Signature
----------------------------- -----------------------------
Address Title
Name:
----------------------------- ------------------------
Zip Code (Please Type or Print)
Area Code and Tel. No. Dated:
------- ----------------------
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES
FOR OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
- 3 -
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.
ATTORNEYS AND COUNSELORS AT LAW
ENERGY PLAZA - 1601 BRYAN STREET, 33RD FLOOR
DALLAS, TEXAS 75201
Exhibit 5(a)
April 3, 1998
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed exchange (Exchange Offer)
by Texas Utilities Company (Company) of any and all of its
outstanding 6.375% Series C Senior Notes due 2008 (Old Notes)
for an equal principal amount of its 6.375% Series C Exchange
Senior Notes due 2008 (New Notes), as contemplated in the
Company's Form S-4 registration statement (Registration
Statement) to be filed by the Company with the Securities and
Exchange Commission (Commission) under the Securities Act of
1933, on or about the date hereof, we are of the opinion that:
1. The Company is a corporation validly
organized and existing under the laws of
the State of Texas.
2. All requisite action necessary to make the
New Notes valid, legal and binding
obligations of the Company shall have been
taken when the Exchange Offer shall have
been completed and any Old Notes validly
tendered pursuant thereto shall have been
exchanged for the New Notes as contemplated
in the Registration Statement and any
prospectus relating to the Exchange Offer.
We are members of the State Bar of Texas and do
not hold ourselves out as experts on the laws of New York.
As to all matters of New York law, we have with your
consent relied upon an opinion of even date herewith
addressed to you by Reid & Priest LLP, of New York, New
York.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the use
of our name as counsel in the Registration Statement.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By: /s/ T.A. Mack
-----------------
A Partner
REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019-4097
Exhibit 5(b) and 8
(212) 603-2000
New York, New York
April 3, 1998
Texas Utilities Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Referring to the proposed exchange (Exchange Offer) by Texas
Utilities Company (Company) of any and all of its outstanding
6.375% Series C Senior Notes due 2008 (Old Notes) for an equal
principal amount of its 6.375% Series C Exchange Senior Notes due 2008
(New Notes), as contemplated in the Company's Form S-4 registration
statement (Registration Statement) to be filed by the Company with the
Securities and Exchange Commission (Commission) under the Securities
Act of 1933, on or about the date hereof, we are of the opinion that:
1. The Company is a corporation validly organized and
existing under the laws of the State of Texas.
2. All requisite action necessary to make the New Notes
valid, legal and binding obligations of the Company
shall have been taken when the Exchange Offer shall
have been completed and any Old Notes validly tendered
pursuant thereto shall have been exchanged for the New
Notes as contemplated in the Registration Statement and
any prospectus relating to the Exchange Offer.
We are members of the New York Bar and do not hold ourselves
out as experts on the laws of the state of Texas. Accordingly, in
rendering this opinion, we have relied, with your consent, as to all
matters governed by the laws of Texas, upon an opinion of even date
herewith addressed to you by Worsham, Forsythe & Wooldridge, L.L.P.,
of Dallas, Texas, General Counsel for the Company, which is being
filed as an exhibit to the Registration Statement.
We confirm our opinion as set forth under the caption
"Certain United States Federal Income Tax Consequences" in the
prospectus constituting a part of the Registration Statement.
We hereby consent to the use of our name in such
Registration Statement and to the use of this opinion as an exhibit
thereto.
Very truly yours,
/s/ Reid & Priest LLP
Reid & Priest LLP
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement on Form S-4 of Texas Utilities Company of our report
dated February 24, 1998, appearing in Texas Utilities Company's
Annual Report on Form 10-K for the year ended December 31, 1997
and to the reference to us under the heading "Experts" in the
Prospectus which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Dallas, Texas
April 3, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
TEXAS UTILITIES COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-1837355
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
_________________
6.375% SERIES C SENIOR NOTES DUE 2008
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance 550 17th Street, N.W., Washington, D.C.
Corporation 20429
New York Clearing House New York, N.Y.
Asociation
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The Bank
of New York (formerly Irving Trust Company) as now
in effect, which contains the authority to
commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. - The consent of the Trustee required by Section
321(b) of the Act. (Exhibit 6 to Form T-1 filed
with Registration Statement No. 33-44051.)
7. - A copy of the latest report of condition of the
Trustee published pursuant to law or to the
requirements of its supervising or examining
authority.
-------------------------
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless amended
by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 20th day of March, 1998.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
---------------------------
Walter N. Gitlin
Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the
Federal Reserve System, at the close of business September 30,
1997, published in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . $ 5,004,638
Interest-bearing balances . . . . . . . . . . . . 1,271,514
Securities:
Held-to-maturity securities . . . . . . . . . . . 1,105,782
Available-for-sale securities . . . . . . . . . . 3,164,271
Federal funds sold and Securities
purchased under agreements to resell . . . . . 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . 34,916,196
LESS: Allowance for loan and
lease losses . . . . . . . . . . . 581,177
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . 34,334,590
Assets held in trading accounts . . . . . . . . . . 2,035,284
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . 671,664
Other real estate owned . . . . . . . . . . . . . . 13,306
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . 210,685
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . 1,463,446
Intangible assets . . . . . . . . . . . . . . . . . 753,190
Other assets . . . . . . . . . . . . . . . . . . . 1,784,796
-----------
Total assets . . . . . . . . . . . . . . . . . . . $57,536,995
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $27,270,824
Noninterest-bearing . . . . . . . . 12,160,977
Interest-bearing . . . . . . . . . 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . 14,687,806
Noninterest-bearing . . . . . . . . 657,479
Interest-bearing . . . . . . . . . 14,030,327
Federal funds purchased and Securities
sold under agreements to repurchase . . . . . . 1,946,099
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . 283,793
Trading liabilities . . . . . . . . . . . . . . . . 1,553,539
Other borrowed money:
With remaining maturity of one year or less . . . 2,245,014
With remaining maturity of more than
one year through three years . . . . . . . . . 0
With remaining maturity of more than
three years . . . . . . . . . . . . . . . . . 45,664
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . 1,473,588
Subordinated notes and debentures . . . . . . . . . 1,018,940
Other liabilities . . . . . . . . . . . . . . . . . 2,193,031
----------
Total liabilities . . . . . . . . . . . . . . . . . 52,718,298
----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . 1,135,284
Surplus . . . . . . . . . . . . . . . . . . . . . . 731,319
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . 2,943,008
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . 25,428
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . (16,342)
-----------
Total equity capital . . . . . . . . . . . . . . . 4,818,697
-----------
Total liabilities and equity capital . . . . . . . $57,536,995
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
___________, 1998
EXCHANGE AGENT AGREEMENT
------------------------
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street 21st Floor
New York, New York 10286
Ladies and Gentlemen:
Texas Utilities Company (the "Company") proposes to
make an offer (the "Exchange Offer") to exchange equal principal
amounts of up to $200,000,000, principal amount of its 6.375%
Series C Senior Notes due 2008 (the "Old Securities") for equal
principal amounts of its 6.375% Series C Exchange Senior Notes
due 2008 (the "New Securities"). The terms and conditions of the
Exchange Offer as currently contemplated are set forth in a
prospectus, dated ___________, 1998 (the "Prospectus"), proposed
to be distributed to all holders of the Old Securities. The Old
Securities and the New Securities are collectively referred to
herein as the "Securities". Capitalized terms used herein and
not defined shall have the meanings ascribed to them in the
Prospectus or the Letter of Transmittal to be delivered with the
Prospectus to record holders of the Old Securities ("Letter of
Transmittal").
The Company hereby appoints The Bank of New York to act
as exchange agent (the "Exchange Agent") in connection with the
Exchange Offer. References hereinafter to "you" shall refer to
The Bank of New York.
The Exchange Offer is expected to be commenced by the
Company on or about _____________, 1998. The Letter of
Transmittal accompanying the Prospectus (or in the case of book-
entry securities, the ATOP system) is to be used by the holders
of the Old Securities to accept the Exchange Offer and contains
instructions with respect to the delivery of certificates for Old
Securities tendered in connection therewith.
The Exchange Offer shall expire at 5:00 P.M., New York
City time, on _____________, 1998 or on such later date or time
to which the Company may extend the Exchange Offer (the
"Expiration Date"). Subject to the terms and conditions set
forth in the Prospectus, the Company expressly reserves the right
to extend the Exchange Offer from time to time and may extend the
Exchange Offer by giving oral (confirmed in writing) or written
notice to you before 9:00 A.M., New York City time, on the
business day following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend, in
any way not inconsistent with the Registration Rights Agreement,
or terminate the Exchange Offer, and not to accept for exchange
any Old Securities not theretofore accepted for exchange, upon
the occurrence of any of the conditions of the Exchange Offer
specified in the Prospectus under the caption "The Exchange Offer
-Conditions." The Company will give oral (confirmed in writing)
or written notice of any amendment, termination or nonacceptance
to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are
to act in accordance with the following instructions:
1. You will perform such duties and only such duties
as are specifically set forth in the section of the Prospectus
captioned "The Exchange Offer" and in the Letter of Transmittal
or as specifically set forth herein; provided, however, that in
-------- -------
no way will your general duty to act in good faith and without
gross negligence be discharged by the foregoing.
2. You will establish an account with respect to the
Old Securities at The Depository Trust Company (the "Book-Entry
Transfer Facility") for purposes of the Exchange Offer within two
business days after the date of the Prospectus, and any financial
institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of the Old
Securities by causing the Book-Entry Transfer Facility to
transfer such Old Securities into your account in accordance with
the Book-Entry Transfer Facility's procedure for such transfer.
3. You are to examine each of the Letters of
Transmittal and certificates for Old Securities (or confirmation
of book-entry transfer into your account at the Book-Entry
Transfer Facility) and any other documents delivered or mailed to
you by or for holders of the Old Securities to ascertain whether:
(i) the Letters of Transmittal and any such other documents are
duly executed and properly completed in accordance with
instructions set forth therein and (ii) the Old Securities have
otherwise been properly tendered. In each case where the Letter
of Transmittal or any other document has been improperly
completed or executed or any of the certificates for Old
Securities are not in proper form for transfer or some other
irregularity in connection with the acceptance of the Exchange
Offer exists, you will endeavor to inform the presenters of the
need for fulfillment of all requirements and to take any other
action as may be necessary or advisable to cause such
irregularity to be corrected.
4. With the approval of the President, Senior Vice
President, Executive Vice President, any Vice President or the
Treasurer of the Company (such approval, if given orally, to be
confirmed in writing) or any other party designated by such an
officer in writing, you are authorized to waive any
irregularities in connection with any tender of Old Securities
pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set
forth in the Letter of Transmittal and in the section of the
Prospectus captioned "The Exchange Offer -Procedures for
Tendering", and Old Securities shall be considered properly
tendered to you only when tendered in accordance with the
procedures set forth therein. Notwithstanding the provisions of
this paragraph 5, Old Securities which the President, Senior Vice
President, Executive Vice President, any Vice President or the
Treasurer of the Company shall approve as having been properly
tendered shall be considered to be properly tendered (such
approval, if given orally, shall be confirmed in writing).
6. You shall advise the Company with respect to any
Old Securities received subsequent to the Expiration Date and
accept its instructions with respect to disposition of such Old
Securities.
7. You shall accept tenders:
a. in cases where the Old Securities are
registered in two or more names only if signed by all named
holders;
b. in cases where the signing person (as
indicated on the Letter of Transmittal) is acting in a
fiduciary or a representative capacity only when proper
evidence of his or her authority so to act is submitted; and
c. from persons other than the registered holder
of Old Securities provided that customary transfer
requirements, including any applicable transfer taxes, are
fulfilled.
You shall accept partial tenders of Old Securities when so
indicated and as permitted in the Letter of Transmittal and
deliver certificates for Old Securities to the transfer agent for
split-up and return any untendered Old Securities to the holder
(or such other person as may be designated in the Letter of
Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the
conditions to the Exchange Offer, the Company will notify you
(such notice if given orally, to be confirmed in writing) of its
acceptance, promptly after the Expiration Date, of all Old
Securities properly tendered and you, on behalf of the Company,
will exchange such Old Securities for New Securities and cause
such Old Securities to be cancelled. Delivery of New Securities
will be made on behalf of the Company by you at the rate of
$1,000 principal amount of New Securities for each $1,000
principal amount of the corresponding series of Old Securities
tendered promptly after notice (such notice if given orally, to
be confirmed in writing) of acceptance of said Old Securities by
the Company; provided, however, that in all cases, Old Securities
tendered pursuant to the Exchange Offer will be exchanged only
after timely receipt by you of certificates for such Old
Securities (or confirmation of book-entry transfer into your
account at the Book-Entry Transfer Facility), a properly
completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees and any other
required documents. You shall issue New Securities only in
denominations of $5,000 or any integral multiple of $1,000 in
excess thereof.
9. Tenders pursuant to the Exchange Offer are
irrevocable, except that, subject to the terms and upon the
conditions set forth in the Prospectus and the Letter of
Transmittal, Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any
Old Securities tendered if any of the conditions set forth in the
Exchange Offer are not met. Notice of any decision by the
Company not to exchange any Old Securities tendered shall be
given (and confirmed in writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company
does not accept for exchange all or part of the Old Securities
tendered because of an invalid tender, the occurrence of certain
other events set forth in the Prospectus under the caption "The
Exchange Offer -Conditions" or otherwise, you shall as soon as
practicable after the expiration or termination of the Exchange
Offer return those certificates for unaccepted Old Securities (or
effect appropriate book-entry transfer), together with any
related required documents and the Letters of Transmittal
relating thereto that are in your possession, to the persons who
deposited them (or effected such book-entry transfer).
12. All certificates for reissued Old Securities,
unaccepted Old Securities or for New Securities shall be
forwarded by first-class mail.
13. You are not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker,
dealer, bank or other persons or to engage or utilize any person
to solicit tenders.
14. As Exchange Agent hereunder you:
a. shall have no duties or obligations other
than as provided in paragraph 1, those specifically set
forth herein or as may be subsequently agreed to in writing
by you and the Company;
b. will be regarded as making no representations
and having no responsibilities as to the validity,
sufficiency, value or genuineness of any of the certificates
or the Old Securities represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to
and will make no representation as to the validity, value or
genuineness of the Exchange Offer;
c. shall not be obligated to take any legal
action hereunder which might in your reasonable judgment
involve any expense or liability, unless you shall have been
furnished with reasonable indemnity;
d. may reasonably rely on and shall be protected
in acting in reliance upon any certificate, instrument,
opinion, notice, letter, telegram or other document or
security delivered to you and reasonably believed by you to
be genuine and to have been signed by the proper party or
parties;
e. may reasonably act upon any tender,
statement, request, comment, agreement or other instrument
whatsoever not only as to its due execution and validity and
effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which you
shall in good faith believe to be genuine or to have been
signed or represented by a proper person or persons;
f. may rely on and shall be protected in acting
upon written or oral instructions from any officer of the
Company;
g. may consult with your counsel with respect to
any questions relating to your duties and responsibilities
and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by you
hereunder in good faith and in accordance with the advice or
opinion of such counsel; and
h. shall not advise any person tendering Old
Securities pursuant to the Exchange Offer as to whether to
tender or refrain from tendering any portion of Old
Securities or as to the market value or decline or
appreciation in market value of any Old Securities.
15. You shall take such action as may from time to
time be requested by the Company or its counsel (and such other
action as you may reasonably deem appropriate) to furnish copies
of the Prospectus, Letter of Transmittal and the Notice of
Guaranteed Delivery (as described in the Prospectus) or such
other forms as may be approved from time to time by the Company,
to all persons requesting such documents and to accept and comply
with telephone requests for information relating to the Exchange
Offer, provided that such information shall relate only to the
procedures for accepting (or withdrawing from) the Exchange
Offer. The Company will furnish you with copies of such
documents at your request. All other requests for information
relating to the Exchange Offer shall be directed to the Company,
Attention: Treasurer.
16. You shall advise by facsimile transmission or
telephone, and promptly thereafter confirm in writing to the
Treasurer of the Company and such other person or persons as it
may request, daily (and more frequently during the week
immediately preceding the Expiration Date and if otherwise
requested) up to and including the Expiration Date, as to the
principal amount of Old Securities which have been tendered
pursuant to the Exchange Offer and the items received by you
pursuant to this Agreement, separately reporting and giving
cumulative totals as to items properly received and items
improperly received. In addition, you will also inform, and
cooperate in making available to, the Company or any such other
person or persons upon oral request made from time to time prior
to the Expiration Date of such other information as it or he or
she reasonably requests. Such cooperation shall include, without
limitation, the granting by you to the Company and such person as
the Company may request of access to those persons on your staff
who are responsible for receiving tenders, in order to ensure
that immediately prior to the Expiration Date the Company shall
have received information in sufficient detail to enable it to
decide whether to extend the Exchange Offer. You shall prepare a
final list of all persons whose tenders were accepted, the
aggregate principal amount of Old Securities tendered and the
aggregate principal amount of Old Securities accepted and deliver
said list to the Company.
17. Letters of Transmittal, book-entry confirmations
and Notices of Guaranteed Delivery shall be stamped by you as to
the date and the time of receipt thereof and shall be preserved
by you for a period of time at least equal to the period of time
you preserve other records pertaining to the transfer of
securities. You shall dispose of unused Letters of Transmittal
and other surplus materials by returning them to the Company.
18. You hereby expressly waive any lien, encumbrance
or right of set-off whatsoever that you may have with respect to
funds deposited with you for the payment of transfer taxes by
reasons of amounts, if any, borrowed by the Company, or any of
its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder,
you shall be entitled to such compensation as set forth on
Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus
and the Letter of Transmittal and further acknowledge that you
have examined each of them. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the Letter of
Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two
documents, except with respect to the duties, liabilities and
indemnification of you as Exchange Agent, which shall be
controlled by this Agreement.
21. The Company covenants and agrees to indemnify and
hold you harmless in your capacity as Exchange Agent hereunder
against any loss, liability, cost or expense, including
attorneys' fees and expenses, arising out of or in connection
with any act, omission, delay or refusal made by you in reliance
upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document
reasonably believed by you to be valid, genuine and sufficient
and in accepting any tender or effecting any transfer of Old
Securities reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept
any tenders or effect any transfer of Old Securities; provided,
however, that the Company shall not be liable for indemnification
or otherwise for any loss, liability, cost or expense to the
extent arising out of your gross negligence or willful
misconduct. In no case shall the Company be liable under this
indemnity with respect to any claim against you unless the
Company shall be notified by you, by letter or by facsimile
confirmed by letter, of the written assertion of a claim against
you or of any other action commenced against you, promptly after
you shall have received any such written assertion or notice of
commencement of action. The Company shall be entitled to
participate at its own expense in the defense of any such claim
or other action, and, if the Company so elects, the Company shall
assume the defense of any suit brought to enforce any such claim.
In the event that the Company shall assume the defense of any
such suit, the Company shall not be liable for the fees and
expenses of any additional counsel thereafter retained by you so
long as the Company shall retain counsel satisfactory to you to
defend such suit, and so long as you shall have not determined,
in your reasonable judgment, that a conflict of interest exists
between you and the Company.
22. You shall arrange to comply with all requirements
under the tax laws of the United States, including those relating
to missing Tax Identification Numbers, and shall file any
appropriate reports with the Internal Revenue Service. The
Company understands that you are required to deduct 31% on
payments to holders who have not supplied their correct Taxpayer
Identification Number or required certification. Such funds will
be turned over to the Internal Revenue Service in accordance with
applicable regulations.
23. You shall deliver or cause to be delivered, in a
timely manner to each governmental authority to which any
transfer taxes are payable in respect of the exchange of Old
Securities, your check in the amount of all transfer taxes so
payable, and the Company shall reimburse you for the amount of
any and all transfer taxes payable in respect of the exchange of
Old Securities; provided, however, that you shall reimburse the
Company for amounts refunded to you in respect of your payment of
any such transfer taxes, at such time as such refund is received
by you.
24. This Agreement and your appointment as Exchange
Agent hereunder shall be construed and enforced in accordance
with the laws of the State of New York applicable to agreements
made and to be performed entirely within such state, and without
regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
26. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to
be modified, amended, rescinded, cancelled or waived, in whole or
in part, except by a written instrument signed by a duly
authorized representative of the party to be charged. This
Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices,
requests and other communications to any party hereunder shall be
in writing (including facsimile or similar writing) and shall be
given to such party, addressed to it, at its address or telecopy
number set forth below:
If to the Company:
Texas Utilities Company
1601 Bryan Street
Dallas, Texas 75201
Facsimile: 214-812-2488
Attention: Treasurer
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
29. Unless terminated earlier by the parties hereto,
this Agreement shall terminate 90 days following the Expiration
Date. Notwithstanding the foregoing, Paragraphs 19, 21 and 23
shall survive the termination of this Agreement. Upon any
termination of this Agreement, you shall promptly deliver to the
Company any certificates for Securities, funds or property then
held by you as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as
of the date hereof.
<PAGE>
Please acknowledge receipt of this Agreement and
confirm the arrangements herein provided by signing and returning
the enclosed copy.
TEXAS UTILITIES COMPANY
By:______________________
Name:
Title:
Accepted as of the date
first above written:
THE BANK OF NEW YORK, as Exchange Agent
By:_____________________
Name:
Title:
<PAGE>
SCHEDULE I
FEES
