As filed with the Securities and Exchange Commission on August 23, 1999
Registration Nos. 333- , 333- -01, 333- -02 and 333- -03
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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TXU GAS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 75-0399066
(STATE OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
TXU GAS CAPITAL II
TXU GAS CAPITAL III
TXU GAS CAPITAL IV
(EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
DELAWARE TO BE APPLIED FOR
(STATE OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO'S.)
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANTS'
PRINCIPAL EXECUTIVE OFFICES)
ROBERT A. WOOLDRIDGE, Esq. PETER B. TINKHAM ROBERT J. REGER, JR., Esq.
Worsham, Forsythe Executive Vice President Thelen Reid & Priest LLP
& Wooldridge, L.L.P. TXU Business Services 40 West 57th Street
1601 Bryan Street Company New York, New York 10019
Dallas, Texas 75201 1601 Bryan Street (212) 603-2000
(214) 979-3000 Dallas, Texas 75201
(214) 812-4600
(NAMES AND ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING
AREA CODES, OF AGENTS FOR SERVICE)
------------------------------------
It is respectfully requested that the Commission also send copies of all
notices, orders and communications to:
RICHARD L. HARDEN, Esq.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE WHEN WARRANTED BY
MARKET CONDITIONS AND OTHER FACTORS.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
<PAGE>
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
==============================================================================
TITLE
OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT PRICE FEE
- ------------------------------------------------------------------------------
Debt
Securities.... (1)(4) (2) (1)(2)(3)(4) N/A
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Preferred Trust
Securities.... (1)(5) (2) (1)(2)(3)(5) N/A
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TXU Gas
Company
Guarantee
with respect
to Preferred
Trust
Securities
(6)(7)........ N/A
- ------------------------------------------------------------------------------
TXU Gas
Company
Junior
Subordinated
Debentures(8). N/A
- ------------------------------------------------------------------------------
Total(9)...... $500,000,000(3) (2) $500,000,000(3) $139,000
=============================================================================
(1) In no event will the aggregate offering price of all Debt Securities and
Preferred Trust Securities issued from time to time pursuant to this
Registration Statement exceed $500,000,000. If any such securities are
issued at an original issue discount, then the aggregate initial offering
price as so discounted will not exceed $500,000,000, notwithstanding that
the stated principal amount of those securities may exceed such amount.
(2) The proposed maximum offering price per unit will be determined, from time
to time, by the registrants in connection with the issuance of the
securities registered hereunder.
(3) Exclusive of accrued interest or distributions, if any.
(4) Subject to footnote (1), there is being registered hereunder an
indeterminate principal amount of Debt Securities which may be sold, from
time to time, by TXU Gas Company.
(5) Subject to footnote (1), there is being registered hereunder an
indeterminate amount of Preferred Trust Securities which may be sold, from
time to time, by TXU Gas Capital II, TXU Gas Capital III and/or TXU Gas
Capital IV.
(6) No separate consideration will be received for the TXU Gas Guarantee or the
Agreement as to Expenses and Liabilities.
(7) This registration is deemed to include the rights of the holders of the
Preferred Trust Securities under the Guarantee, the Trust Agreement, the
Junior Subordinated Debentures, the Subordinated Indenture and the
Agreement as to Expenses and Liabilities, together constituting the backup
undertakings as described in this Registration Statement.
(8) The Junior Subordinated Debentures will be purchased by TXU Gas Capital II,
TXU Gas Capital III and/or TXU Gas Capital IV with the proceeds of the sale
of Preferred Trust Securities. No separate consideration will be received
for the Junior Subordinated Debentures.
(9) Pursuant to Rule 429 under the Securities Act of 1933, the combined
Prospectus filed as part of this Registration Statement also relates to
$100,000,000 of Debt Securities registered pursuant to Registration
Statement File Nos. 333-43811 and 333- 43811-01. A registration fee with
respect to that registration statement was paid in the amount of $81,125.
---------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS WILL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT WILL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell or the solicitation of an offer to buy these securities in any
jurisdiction in which an offer, solicitation or sale is not permitted.
SUBJECT TO COMPLETION, DATED AUGUST 23, 1999
PROSPECTUS
$600,000,000
AGGREGATE AMOUNT
---------------
TXU GAS COMPANY
DEBT SECURITIES
-------------
TXU GAS CAPITAL II
TXU GAS CAPITAL III
TXU GAS CAPITAL IV
PREFERRED TRUST SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED AS SET
FORTH IN THIS PROSPECTUS BY
TXU GAS COMPANY
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We will provide specific terms of these securities,
their offering prices and how they will be offered
in supplements to this prospectus.
You should read this prospectus and any supplement carefully
before you invest.
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THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
This prospectus is dated , 1999.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, using a "shelf" registration
process. Under this shelf process, we may, over the next two years, sell
combinations of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $600,000,000. This amount includes
$100,000,000 of securities registered under an earlier registration statement.
This prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
WHERE YOU CAN FIND MORE INFORMATION.
For more detailed information about the securities, you can read the
exhibits to the registration statement. Those exhibits have been either filed
with the registration statement or incorporated by reference to earlier SEC
filings listed in the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
TXU Gas Company, a Texas corporation, changed its name from ENSERCH
Corporation on June 14, 1999. TXU Gas Company files annual, quarterly and
special reports and other information with the SEC under File No. 1-3183. These
SEC filings are available to the public over the Internet at the SEC's website
at http://www.sec.gov. You may also read and copy any of these SEC filings at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, until we sell
all of the securities described in this prospectus.
() TXU Gas Company's Annual Report on Form 10-K for the year ended December 31,
1998.
() TXU Gas Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999 and June 30, 1999.
You may request a copy of these filings at no cost by writing or
contacting TXU Gas Company at the following address: Secretary, TXU Gas Company,
Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201; telephone number (214)
812-4600.
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TXU GAS COMPANY
TXU Gas Company is an integrated company focused on natural gas operating
primarily in the north central, eastern and western parts of Texas. TXU Gas
Company 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;
( ) 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.
On August 5, 1997, Texas Utilities Company, now doing business as TXU
Corp, acquired TXU Gas Company. Immediately before the transaction, TXU Gas
Company's ownership interests in Enserch Exploration, Inc. and Lone Star Energy
Plant Operations, Inc. were distributed to the holders of the TXU Gas' common
stock.
TXU Corp is a holding company whose principal operations are conducted
through TXU Electric Company, TXU Gas Company, Eastern Energy Limited and
Eastern Group plc. Through these and other subsidiaries, TXU Corp engages in the
generation, purchase, transmission, distribution and sale of electricity; the
gathering, processing, transportation and distribution of natural gas; energy
marketing; and telecommunications, retail energy services, international gas
operations, power development and other businesses, primarily in the United
States, the United Kingdom and Australia.
TXU Gas Company's principal place of business is Energy Plaza, 1601 Bryan
Street, Dallas, Texas 75201.
TXU GAS CAPITAL II, TXU GAS CAPITAL III, AND TXU GAS CAPITAL IV
TXU Gas Capital II, TXU Gas Capital III and TXU Gas Capital IV are
identical Delaware business trusts and each will be described in this prospectus
as TXU Gas Capital. TXU Gas Capital was created under a trust agreement among
TXU Gas Company as depositor of TXU Gas Capital, The Bank of New York as the
property trustee and The Bank of New York (Delaware) as the Delaware trustee and
an administrative trustee appointed by TXU Gas Company. The trust agreement will
be amended and restated substantially in the form filed as an exhibit to the
registration statement. TXU Gas Capital exists only to issue its preferred trust
securities and common trust securities and to hold the junior subordinated
debentures of TXU Gas Company as trust assets. All of the common trust
securities will be owned by TXU Gas Company. The common trust securities will
represent at least 3% of the total capital of TXU Gas Capital. Payments will be
made on the common trust securities pro rata with the preferred trust
securities, except that the common trust securities' right to payment will be
subordinated to the rights of the preferred trust securities if there is a
default under the trust agreement. TXU Gas Capital has a term of approximately
40 years, but may dissolve earlier as provided in the trust agreement. TXU Gas
Capital's business and affairs will be conducted by its administrative trustees.
The office of the Delaware trustee in the State of Delaware is White Clay
Center, Route 273, Newark, Delaware 19711. The principal place of business of
TXU Gas Capital is c/o TXU Gas Company, Energy Plaza, 1601 Bryan Street, Dallas,
Texas 75201.
USE OF PROCEEDS
Unless otherwise described in a prospectus supplement, the net proceeds
from the offering of the securities will be used for general corporate purposes
of TXU Gas Company.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
The following ratios were calculated to exclude the effect of businesses
that were disposed of by TXU Gas Company on August 5, 1997, the date TXU Gas
Company was acquired by TXU Corp.
Amount by
Amount Ratio of Which
by Earnings Fixed
Ratio Which to Combined Charges and
of Fixed Fixed Preferred
Earnings Charges Charges and Dividends
to Fixed Exceeded Preferred Exceeded
Period Charges Earnings Dividends Earnings
------ -------- -------- --------- --------
(millions) (millions)
Year ended
December 31, 1994 0.82 $12.8 0.58 $41.8
Year ended
December 31, 1995 1.46 -- 1.18 --
Year ended
December 31, 1996 1.31 -- 1.01 --
January 1, 1997 to
August 5, 1997 0.58 $19.0 0.49 $27.7
August 5, 1997 to
December 31, 1997 0.66 $10.8 0.57 $16.2
Year ended
December 31, 1998 0.68 $24.9 0.64 $29.4
Six months ended
June 30, 1999 0.28 $27.4 0.27 $29.7
DESCRIPTION OF DEBT SECURITIES
The debt securities will be TXU Gas Company's direct unsecured general
obligations. The debt securities will be issued under the Indenture (For
Unsecured Debt Securities), dated as of January 1, 1998, between TXU Gas Company
and The Bank of New York as trustee under the indenture.
Material terms of the debt securities and the indenture are summarized
below. The form of the indenture was filed with the SEC and you should read
the indenture for provisions that may be important to you. The indenture will be
qualified under the Trust Indenture Act of 1939. You should refer to the Trust
Indenture Act for provisions that apply to the debt securities. Whenever
particular provisions or defined terms in the indenture are referred to under
this DESCRIPTION OF DEBT SECURITIES, those provisions or defined terms are
incorporated by reference in this prospectus.
The debt securities will rank equally with all of TXU Gas Company's other
senior and unsubordinated debt.
A prospectus supplement and an officer's certificate relating to any
series of debt securities being offered will include specific terms relating to
that offering. These terms will include any of the following terms that apply to
that series:
( ) The title of the debt securities;
( ) The total principal amount of the debt securities;
( ) The dates on which the principal of the debt securities will be
payable and how it will be paid;
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<PAGE>
( ) The interest rate or rates which the debt securities will bear, or
how the rate or rates will be determined, the interest payment dates
for the debt securities and the regular record dates for interest
payments;
( ) The percentage, if less than 100%, of the principal amount of the
debt securities that will be payable if the maturity of the debt
securities is accelerated;
( ) Any date or dates on which the debt securities may be redeemed at the
option of TXU Gas Company and any restrictions on those redemptions;
( ) Any sinking fund or other provisions that would obligate TXU Gas
Company to repurchase or otherwise redeem the debt securities;
( ) Any changes or additions to the Events of Default under the indenture
or changes or additions to the covenants of TXU Gas Company under the
indenture;
( ) If the debt securities will be issued in denominations other than
$1,000;
( ) If payments on the debt securities may be made in a currency or
currencies other than United States dollars; and
( ) Any other terms of the debt securities not inconsistent with the
terms of the indenture (Indenture, Section 301).
The indenture does not limit the principal amount of debt securities that
TXU Gas Company may issue.
TXU Gas Company may sell debt securities at a discount below their
principal amount. United States federal income tax considerations applicable to
debt securities sold at an original issue discount may be described in the
prospectus supplement. In addition, important United States federal income tax
or other tax considerations applicable to any debt securities denominated or
payable in a currency or currency unit other than United States dollars may be
described in the prospectus supplement.
Except as may otherwise be described in the applicable prospectus
supplement, the covenants contained in the indenture will not afford holders of
debt securities protection in the event of a highly-leveraged transaction
involving TXU Gas Company.
PAYMENT AND PAYING AGENTS
Except as may be provided in the prospectus supplement, interest, if any,
on each debt security payable on each interest payment date will be paid to the
person in whose name that debt security is registered as of the close of
business on the regular record date for the interest payment date. However,
interest payable at maturity will be paid to the person to whom the principal is
paid. If there has been a default in the payment of interest on any debt
security, the defaulted interest may be paid to the holder of the debt security
as of the close of business on a date between 10 and 15 days before the date
proposed by TXU Gas Company for payment of defaulted interest or in any other
manner permitted by any securities exchange on which that debt security may be
listed, if the trustee finds it workable (Indenture, Section 307).
Unless otherwise specified in the prospectus supplement, principal,
premium, if any, and interest on the debt securities at maturity will be payable
upon presentation of the debt securities at the corporate trust office of The
Bank of New York, in The City of New York, as paying agent for TXU Gas Company.
TXU Gas Company may change the place of payment on the debt securities, may
appoint one or more additional paying agents, including TXU Gas Company, and may
remove any paying agent, all at the discretion of TXU Gas Company (Indenture,
Section 602).
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<PAGE>
REGISTRATION AND TRANSFER
Unless otherwise specified in the prospectus supplement, the transfer of
debt securities may be registered, and debt securities may be exchanged for
other debt securities of the same series or tranche, of authorized denominations
and with the same terms and principal amount, at the corporate trust office of
The Bank of New York in The City of New York. TXU Gas Company may change the
place for registration of transfer and exchange of the debt securities and may
designate additional places for registration and exchange (Indenture, Section
602). Unless otherwise provided in the prospectus supplement, no service charge
will be made for any transfer or exchange of the debt securities. However, TXU
Gas Company may require payment to cover any tax or other governmental charge
that may be imposed. TXU Gas Company will not be required to execute or to
provide for the registration of transfer of, or the exchange of, (a) any debt
security during the 15 days before giving any notice of redemption or (b) any
debt security selected for redemption except the unredeemed portion of any debt
security being redeemed in part (Indenture, Section 305).
DEFEASANCE
TXU Gas Company will be discharged from its obligations on the debt
securities of a particular series if it deposits with the trustee sufficient
cash or government securities to pay the principal, interest, any premium and
any other sums when due on the stated maturity date or a redemption date of that
series of debt securities (Indenture, Section 701).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Under the terms of the indenture, TXU Gas 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:
( ) The surviving or successor entity is organized and validly existing
under the laws of any domestic jurisdiction and it expressly assumes
TXU Gas Company's obligations on all debt securities and under the
indenture;
( ) Immediately after giving effect to the transaction, no Event of
Default under the indenture or no event which, after notice or lapse
of time or both, would become an Event of Default under the
indenture, will have occurred and be continuing; and
( ) TXU Gas 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 TXU Gas Company in a merger in
which TXU Gas Company is the surviving entity.
EVENTS OF DEFAULT
"Event of Default", when used in the indenture with respect to debt
securities of a specific series, means any of the following:
( ) Failure to pay interest on any debt security of that series for 30
days after it is due;
( ) Failure to pay the principal of or any premium on any debt security
of that series when due;
( ) Failure to perform any other covenant in the indenture, other than a
covenant that does not relate to the debt securities of that series,
for 90 days after TXU Gas Company receives written notice from the
trustee
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<PAGE>
or TXU Gas Company and the trustee receive written notice from the
holders of 33% in aggregate principal amount of the debt securities;
( ) Events in bankruptcy, insolvency or reorganization of TXU Gas Company
specified in the indenture; or
( ) Any other Event of Default included in any supplemental indenture or
officer's certificate for that series of debt securities (Indenture,
Section 801).
An Event of Default for a particular series of debt securities does not
necessarily constitute an Event of Default for any other series of debt
securities issued under the indenture. The trustee may withhold notice to the
holders of debt securities of any default, except default in the payment of
principal or interest, if it considers the withholding of notice to be in the
interests of the holders.
REMEDIES
If an Event of Default for any series of debt securities occurs and
continues, the trustee or the holders of at least 33% in aggregate principal
amount of all the debt securities of the series may declare the entire principal
amount of all the debt securities of that series, together with accrued
interest, to be due and payable immediately. However, if the Event of Default is
applicable to all outstanding debt securities under the indenture, only the
trustee or holders of at least 33% in aggregate principal amount of all
outstanding debt securities of all series, voting as one class, and not the
holders of any one series, may make that declaration of acceleration (Indenture,
Section 802).
At any time after a 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 of Default giving rise to
the declaration of acceleration will be considered waived, and the declaration
and its consequences will be considered rescinded and annulled, if:
( ) TXU Gas Company has paid or deposited with the trustee a sum
sufficient to pay:
(1) all overdue interest on all debt securities of the
series;
(2) the principal of and premium, if any, on any debt
securities of the series which have otherwise
become due and interest that is currently due;
(3) interest on overdue interest; and
(4) all amounts due to the trustee under the indenture;
and
( ) Any other Event of Default with respect to the debt securities of
that series has been cured or waived as provided in the indenture
(Indenture, Section 802).
There is no automatic acceleration, even in the event of bankruptcy,
insolvency or reorganization of TXU Gas Company.
Other than its duties in case of an Event of Default, the trustee is not
obligated to exercise any of its rights or powers under the indenture at the
request, order or direction of any of the holders, unless the holders offer the
trustee a reasonable indemnity (Indenture, Section 903). If they provide this
reasonable indemnity, the holders of a majority in principal amount of any
series of debt securities 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 power conferred upon the trustee. However, if the Event of
Default relates to more than one series, only the holders of a majority in
aggregate principal amount of all affected series will have the right to give
this direction (Indenture, Section 812). The trustee is not obligated to comply
with directions that conflict with law or other provisions of the indenture.
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<PAGE>
No holder of debt securities of any series will have any right to
institute any proceeding under the indenture, or any remedy under the indenture,
unless:
( ) The holder has previously given to the trustee written notice of a
continuing Event of Default;
( ) The holders of a majority in aggregate principal amount of the
outstanding debt securities of all series in respect of which an
Event of Default has occurred and is continuing have made a written
request to the trustee, and have offered reasonable indemnity to the
trustee to institute proceedings; and
( ) The trustee has failed to institute any proceeding for 60 days after
notice (Indenture, Section 807).
However, these limitations do not apply to a suit by a holder of a debt security
for payment of the principal, premium, if any, or interest on the debt security
on or after the applicable due date (Indenture, Section 808).
TXU Gas Company will provide to the trustee an annual statement by an
appropriate officer as to TXU Gas Company's compliance with all conditions and
covenants under the indenture (Indenture, Section 606).
MODIFICATION AND WAIVER
Without the consent of any holder of debt securities issued under an
indenture, TXU Gas Company and the trustee may enter into one or more
supplemental indentures for any of the following purposes:
( ) To evidence the assumption by any permitted successor of the
covenants of TXU Gas Company in the indenture and in the debt
securities;
( ) To add additional covenants of TXU Gas Company or to surrender any
right or power of TXU Gas Company under the indenture;
( ) To add additional Events of Default;
( ) To change or eliminate or add any provision to the indenture;
provided, however, if the change will adversely affect the interests
of the holders of debt securities of any series in any material
respect, the change, elimination or addition will become effective
only:
(1) when the consent of the holders of debt securities of that
series has been obtained in accordance with the indenture; or
(2) when no debt securities of the affected series remain
outstanding under the indenture;
( ) To provide collateral security for all but not part of the debt
securities;
( ) To establish the form or terms of debt securities of any other series
as permitted by the indenture;
( ) To provide for the authentication and delivery of bearer securities
with or without coupons;
( ) To evidence and provide for the acceptance of appointment of a
successor trustee;
( ) To provide for the procedures required for use of a noncertificated
system of registration for the debt securities of all or any series;
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<PAGE>
( ) To change any place where principal, premium, if any, and interest
will be payable, debt securities may be surrendered for registration
of transfer or exchange and notices to TXU Gas Company may be served;
or
( ) To cure any ambiguity or inconsistency or to make any other
provisions with respect to matters and questions arising under the
indenture; provided that the changes or additions do not adversely
affect the interests of the holders of debt securities of any series
in any material respect (Indenture, Section 1201).
The holders of at least a majority in aggregate principal amount of the
debt securities of all series then outstanding may waive compliance by TXU Gas
Company with some 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 that series, except a default in the payment of
principal, premium, if any, or interest and some 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 the series affected (Indenture,
Section 813).
If the Trust Indenture Act is amended after the date of the indenture in a
way as to require changes to the indenture, the indenture will be deemed to be
amended so as to conform to that amendment to the Trust Indenture Act. TXU Gas
Company and the trustee may, without the consent of any holders, enter into one
or more supplemental indentures to evidence the amendment (Indenture, Section
1201).
The consent of the holders of a majority in aggregate principal amount of
the debt securities of all series then outstanding is required for all other
modifications to the indenture. However, 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 all series that are directly affected will be required. No
amendment or modification may:
( ) 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 of any debt security or its rate of interest or
change the method of calculating the interest rate or reduce any
premium payable upon redemption, or change the currency in which
payments are made, or impair the right to institute suit for the
enforcement of any payment on or after the stated maturity of any
debt security, without the consent of the holder;
( ) Reduce the percentage in principal amount of the outstanding debt
securities of any series whose consent is required for any
supplemental indenture or any waiver of compliance with a provision
of the indenture or any default thereunder and its consequences, or
reduce the requirements for quorum or voting, without the consent of
all the holders of the series; or
( ) Modify some of the provisions of the indenture relating to
supplemental indentures, waivers of some covenants and waivers of
past defaults with respect to the debt securities of any series,
without the consent of the holder of each outstanding debt security
affected by them (Indenture, Section 1202).
A supplemental indenture which changes the indenture solely for the
benefit of one or more particular series of debt securities, or modifies the
rights of the holders of debt securities of one or more series, will not affect
the rights under the indenture of the holders of the debt securities of any
other series.
The indenture provides that debt securities owned by TXU Gas Company or
anyone else required to make payment on the debt securities will be disregarded
and considered not to be outstanding in determining whether the required holders
have given a request or consent (Indenture, Section 101).
TXU Gas Company may fix in advance a record date to determine the required
number of holders entitled to give any request, demand, authorization,
direction, notice, consent, waiver or other act of the holders, but TXU Gas
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Company will have no obligation to do so. If TXU Gas Company fixes a record
date, that request, demand, authorization, direction, notice, consent, waiver or
other act of the holders may be given before or after that record date, but only
the holders of record at the close of business on that record date will be
considered holders for the purposes of determining whether holders of the
required percentage of the outstanding debt securities have authorized or agreed
or consented to the request, demand, authorization, direction, notice, consent,
waiver or other act of the holders. 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 securities and the holder
of every debt security issued upon the registration of transfer of or in
exchange of these debt securities. A transferee will be bound by acts of the
trustee or TXU Gas Company in reliance on them, whether or not notation of that
action is made upon the debt security (Indenture, Section 104).
RESIGNATION OF A TRUSTEE
A trustee may resign at any time by giving written notice to TXU Gas
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 TXU Gas Company. No resignation or removal of a trustee and no
appointment of a successor trustee will be effective until the acceptance of
appointment by a successor trustee. 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 TXU Gas Company has delivered to the trustee a resolution
of its Board of Directors appointing a successor trustee and that successor has
accepted the appointment in accordance with the terms of the respective
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 the holders as they may appear in the security register for debt
securities (Indenture, Section 106).
TITLE
TXU Gas Company, the trustee, and any agent of TXU Gas Company or the
trustee, may treat the person in whose name any debt security is registered as
the absolute owner of it, whether or not the debt security may be overdue, for
the purpose of making payments and for all other purposes irrespective of notice
to the contrary (Indenture, Section 308).
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 (Indenture, Section 112).
REGARDING THE TRUSTEE
The trustee will be The Bank of New York. In addition to acting as
trustee, The Bank of New York acts, and may act, as trustee under various
indentures and trusts of TXU Gas Company, TXU Corp and other affiliates,
including the trust agreement for the preferred trust securities and the
indenture for the junior subordinated debentures described below. TXU Gas
Company, TXU Corp and other affiliates maintain deposit accounts and credit and
liquidity facilities and conduct other banking transactions with the trustee in
the ordinary course of their businesses.
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DESCRIPTION OF TXU GAS CAPITAL'S PREFERRED TRUST SECURITIES AND COMMON
TRUST SECURITIES
TXU Gas Capital will issue preferred trust securities and common trust
securities under a trust agreement. The preferred trust securities will
represent preferred undivided beneficial interests in the assets of TXU Gas
Capital and will entitle their holders to a preference over the common trust
securities with respect to distributions and amounts payable on redemption or
liquidation. The material terms of the trust agreement are summarized
below. The form of trust agreement was filed with the SEC and you should read
the trust agreement for provisions that may be important to you. The trust
agreement will be qualified as an indenture under the Trust Indenture Act. You
should also refer to the Trust Indenture Act for provisions that apply to the
preferred trust securities. Wherever particular defined terms of the trust
agreement are referred to, those defined terms are incorporated in this
prospectus by reference.
The preferred trust securities and common trust securities issued by TXU
Gas Capital will be substantially the same except that, if TXU Gas Capital fails
to make required payments, the rights of TXU Gas Company as the holder of the
common trust securities to payment of distributions and upon liquidation or
redemption will be subordinated to the rights of the holders of the preferred
trust securities. If there is a continuing Event of Default under the
subordinated indenture described below, holders of the preferred trust
securities may vote to appoint, remove or replace any of trustees of TXU Gas
Capital. All of the common trust securities of TXU Gas Capital will be owned by
TXU Gas Company.
TXU Gas Capital will use the proceeds from the sale of the preferred trust
securities and common trust securities to purchase junior subordinated
debentures from TXU Gas Company in an aggregate principal amount equal to the
aggregate liquidation preference amount of the preferred trust securities and
the common trust securities. The junior subordinated debentures will be issued
under the Subordinated Indenture, dated June 1, 1998, between TXU Gas Company
and The Bank of New York, as debenture trustee. The property trustee will hold
the junior subordinated debentures in trust for the benefit of holders of the
preferred trust securities and common trust securities (Trust Agreement, Section
2.09).
TXU Gas Company will fully and unconditionally guarantee payments due on
the preferred trust securities through a combination of the following:
( ) TXU Gas Company's obligations under the junior subordinated
debentures;
( ) The rights of holders of preferred trust securities to enforce those
obligations;
( ) TXU Gas Company's agreement to pay the expenses of TXU Gas Capital;
or
( ) TXU Gas Company's guarantee of payments due on the preferred trust
securities to the extent of TXU Gas Capital's assets.
A prospectus supplement relating to the preferred trust securities will
include specific terms of those securities and of the junior subordinated
debentures. For a description of some specific terms that will affect both the
preferred trust securities and the junior subordinated debentures and your
rights under each, see DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES below.
DISTRIBUTIONS
The only income of TXU Gas Capital available for distribution to the
holders of preferred trust securities will be payments on the junior
subordinated debentures. If TXU Gas Company does not make interest payments on
the junior subordinated debentures, TXU Gas Capital will not have funds
available to pay distributions on preferred trust securities. The payment of
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distributions, if and to the extent TXU Gas Capital has sufficient funds
available for the payment of those distributions, is guaranteed on a limited
basis by TXU Gas Company.
So long as there is no default in the payment of interest on the junior
subordinated debentures, TXU Gas Company may extend the interest payment period
from time to time on the junior subordinated debentures for one or more periods.
As a consequence, distributions on preferred trust securities would be deferred
during any such period. Interest would, however, continue to accrue. If TXU Gas
Company extends the interest period or is in default under the guarantee or with
respect to payments on the junior subordinated debentures, TXU Gas Company may
not:
( ) Declare or pay any dividend or distribution on its capital stock,
other than dividends paid in shares of common stock of TXU Gas
Company;
( ) Redeem, purchase, acquire or make a liquidation payment with respect
to any of its capital stock;
( ) Redeem any indebtedness that is equal in right of payment with the
junior subordinated debentures; or
( ) Make any guarantee payments with respect to any of the above.
Any extension period with respect to payment of interest on the junior
subordinated debentures, or any extended interest payment period in respect of
other securities issued under the subordinated indenture or on any similar
securities, will apply to all securities of the same type. Those extensions will
also apply to distributions on preferred trust securities and common trust
securities and all other securities with terms substantially the same as
preferred trust securities and common trust securities. Before an extension
period ends, TXU Gas Company may further extend the interest payment period. No
extension period as further extended may exceed 20 consecutive quarters. After
any extension period and the payment of all amounts then due, TXU Gas Company
may select a new extended interest payment period. No interest period may be
extended beyond the maturity of the junior subordinated debentures.
REDEMPTION OF PREFERRED TRUST SECURITIES AND COMMON TRUST SECURITIES
Whenever junior subordinated debentures are repaid, whether at maturity or
earlier redemption, the proceeds will be applied to redeem a like amount of
preferred trust securities and common trust securities. Holders of junior
subordinated debentures will be given not less than 30 nor more than 60 days'
notice of any redemption.
REDEMPTION PROCEDURES
Preferred trust securities will be redeemed at the redemption price plus
accrued and unpaid distributions with the proceeds from the contemporaneous
redemption of junior subordinated debentures. Redemptions of the preferred trust
securities will be made on a redemption date only if TXU Gas Capital has funds
available for the payment of the redemption price plus accrued and unpaid
distributions (Trust Agreement, Section 4.02(c)).
Notice of redemption of preferred trust securities will be irrevocable. On
or before the redemption date, TXU Gas Capital will irrevocably deposit with the
paying agent for preferred trust securities sufficient funds and will give the
paying agent irrevocable instructions and authority to pay the redemption price
plus accrued and unpaid distributions to the holders upon surrender of their
preferred trust securities. Distributions payable on or before a redemption date
will be payable to the holders on the record date for the distribution payment.
If notice is given and funds are deposited as required, then on the redemption
date all rights of holders of the preferred trust securities called for
redemption will cease, except the right of the holders to receive the redemption
price plus accrued and unpaid distributions, and the preferred trust securities
will cease to be outstanding. No interest will accrue on amounts payable on the
redemption date. If any date fixed for redemption of preferred trust securities
is not a business day, then payment will be made on the next business day. No
interest will be payable because of any such delay. If payment of preferred
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trust securities called for redemption is improperly withheld or refused and not
paid either by TXU Gas Capital or by TXU Gas Company in accordance with the
guarantee, distributions on those preferred trust securities will continue to
accrue to the date of payment. That date will be considered the date fixed for
redemption for purposes of calculating the redemption price plus accrued and
unpaid distributions (Trust Agreement, Section 4.02(d)).
Subject to applicable law, including United States federal securities law,
TXU Gas Company may purchase outstanding preferred trust securities by tender,
in the open market or by private agreement.
If preferred trust securities are partially redeemed on a redemption date,
a corresponding percentage of the common trust securities will be redeemed. The
particular preferred trust securities to be redeemed will be selected not more
than 60 days before the redemption date by the property trustee by a method that
the property trustee determines is fair, taking into account the denominations
in which they were issued. The property trustee will promptly notify the
registrar for the preferred trust security in writing of the preferred trust
securities selected for redemption and, where applicable, the partial amount to
be redeemed (Trust Agreement, Section 4.02(f)).
SUBORDINATION OF COMMON TRUST SECURITIES
Payment of distributions on, and the redemption price, plus accrued and
unpaid distributions, of, the preferred trust securities and common trust
securities will be made proportionately based on the liquidation preference
amount. However, if on any distribution payment date or redemption date an Event
of Default under the trust agreement has occurred and is continuing, no payment
on any common trust security will be made until all payments due on the
preferred trust securities have been made. In that case, funds available to the
property trustee will first be applied to the payment in full of all
distributions on, or the redemption price plus accrued and unpaid distributions
of, preferred trust securities then due and payable (Trust Agreement, Section
4.03(a)).
If an Event of Default under the trust agreement results from an Event of
Default under the subordinated indenture, the holder of common trust securities
cannot take action with respect to the trust agreement default until the effect
of all defaults with respect to preferred trust securities has been cured,
waived or otherwise eliminated. Until the Event of Default under the trust
agreement with respect to preferred trust securities has been cured, waived or
otherwise eliminated, the property trustee will act solely on behalf of the
holders of preferred trust securities and not the holders of the common trust
securities. Only holders of preferred trust securities will have the right to
direct the property trustee to act on their behalf (Trust Agreement, Section
4.03(b)).
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
TXU Gas Capital will be dissolved and will be liquidated by the property
trustee on the first to occur of:
( ) The expiration of the term of TXU Gas Capital;
( ) The bankruptcy, dissolution or liquidation of TXU Gas Company;
( ) Redemption of all of the preferred trust securities;
( ) The entry of an order for dissolution of TXU Gas Capital by a court
of competent jurisdiction; and
( ) At any time, at the election of TXU Gas Company (Trust Agreement,
Sections 9.01 and 9.02).
If an early dissolution occurs because of bankruptcy, dissolution or
liquidation of TXU Gas Company, if all the preferred trust securities are
redeemed, or if TXU Gas Company so elects, TXU Gas Capital will be liquidated by
the property trustee as expeditiously as the property trustee determines to be
appropriate. The property trustee will provide for the satisfaction of
liabilities of creditors, if any, and distribute to each holder of the preferred
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trust securities and common trust securities a proportionate amount of junior
subordinated debentures. If a distribution of junior subordinated debentures is
determined by the property trustee not to be practical, holders will be entitled
to receive, out of the assets of TXU Gas Capital after adequate provision for
the satisfaction of liabilities of creditors, if any, an amount equal to the
aggregate liquidation preference of the preferred trust securities plus accrued
and unpaid distributions on them to the date of payment. If this liquidation
distribution can be paid only in part because TXU Gas Capital has insufficient
assets available to pay in full the aggregate liquidation distribution, then the
amounts payable directly by TXU Gas Capital on the preferred trust securities
will be paid to the holders proportionately based on the total liquidation
preference amount of the preferred trust securities they hold. TXU Gas Company,
as holder of the common trust securities, will be entitled to receive
distributions upon any dissolution proportionately with the holders of the
preferred trust securities, except that if an Event of Default has occurred and
is continuing under the trust agreement, the preferred trust securities will
have a preference over the common trust securities (Trust Agreement, Section
9.04).
EVENTS OF DEFAULT; NOTICE
Any one of the following events will be an Event of Default under the
trust agreement whether it will be voluntary or involuntary or be effected by
operation of law or in accordance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body:
( ) The occurrence of an Event of Default under the subordinated
indenture;
( ) Default by TXU Gas Capital in the payment of any distribution when it
becomes due and payable, and continuation of that default for 30
days;
( ) Default by TXU Gas Capital in the payment of any redemption price,
plus accrued and unpaid distributions, of any preferred trust
security or common trust security when it becomes due and payable;
( ) Default in the performance, or breach, in any material respect, of
any covenant or warranty of the trustees in the trust agreement which
is not dealt with above, and the continuation of that default or
breach for 60 days after notice to TXU Gas Capital by the holders of
preferred trust securities having at least 10% of the total
liquidation preference amount of the outstanding preferred trust
securities; or
( ) The occurrence of specified events of bankruptcy or insolvency with
respect to TXU Gas Capital (Trust Agreement, Section 1.01).
Within 90 business days after the occurrence of any Event of Default under
the trust agreement, the property trustee will transmit to the holders of
preferred trust securities and common trust securities and TXU Gas Company
notice of any default actually known to the property trustee, unless that
default has been cured or waived (Trust Agreement, Section 8.01(a)).
A holder of preferred trust securities may directly institute a proceeding
to enforce payment when due directly to the holder of the preferred trust
securities of the principal of or interest on junior subordinated debentures
having a principal amount equal to the aggregate liquidation preference amount
of the holder's preferred trust securities. The holders of preferred trust
securities have no other rights to exercise directly any other remedies
available to the holder of the junior subordinated debentures unless the
property trustee fails to do so (Trust Agreement, Section 6.01(a)).
Unless an Event of Default under the subordinated indenture has occurred
and is continuing, the holder of the common trust securities may remove the
property trustee at any time. If an Event of Default under the subordinated
indenture has occurred and is continuing, the holders of a majority of the total
liquidation preference amount of the outstanding preferred trust securities may
remove the property trustee. Any resignation or removal of the property trustee
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will take effect only on the acceptance of appointment by the successor
property trustee (Trust Agreement, Section 8.10).
MERGER OR CONSOLIDATION OF THE PROPERTY TRUSTEE OR THE DELAWARE TRUSTEE
If the property trustee or the Delaware trustee merge or consolidate with
another entity, or if any entity succeeds to all or substantially all the
corporate trust business of the property trustee or the Delaware trustee, the
successor or surviving company will be the successor to the property trustee or
the Delaware trustee under the trust agreement, so long as it is otherwise
qualified and eligible (Trust Agreement, Section 8.12).
VOTING RIGHTS
Except with respect to amendments to the trust agreement and amendments to
and assignment of the guarantee, the holders of preferred trust securities will
have no voting rights not otherwise required by law or the trust agreement
(Trust Agreement, Section 6.01(a)).
While junior subordinated debentures are held by the property trustee, the
property trustee will not:
( ) Direct the time, method and place to conduct any proceeding for any
remedy available to the debenture trustee, or to execute any trust or
power conferred on the debenture trustee with respect to the junior
subordinated debentures;
( ) Waive any past default under the subordinated indenture;
( ) Exercise any right to rescind or annul a declaration that the
principal of all the junior subordinated debentures will be due and
payable; or
( ) Consent to any amendment, modification or termination of the
subordinated indenture or the junior subordinated debentures, where
that consent will be required;
without, in each case, obtaining the prior approval of the holders of preferred
trust securities having at least 66 2/3% of the liquidation preference amount of
the outstanding preferred trust securities. Where a consent of each holder of
junior subordinated debentures affected is required, no consent will be given by
the property trustee without the prior consent of each holder of the preferred
trust securities. The property trustee will not revoke any action previously
authorized or approved by a vote of the holders of preferred trust securities.
If the property trustee fails to enforce its rights under the junior
subordinated debentures or the trust agreement, to the fullest extent permitted
by law, a holder of the preferred trust securities may institute a legal
proceeding directly against TXU Gas Company to enforce the property trustee's
rights under the junior subordinated debentures or the trust agreement without
first instituting any legal proceeding against the property trustee or anyone
else. The property trustee will notify all holders of preferred trust securities
of any notice of default received from the debenture trustee. The property
trustee will not take any action approved by the consent of the holders of the
preferred trust securities without an opinion of counsel experienced in those
matters to the effect that TXU Gas Capital will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of that action (Trust Agreement, Sections 6.01(a) and
6.01(b)).
Holders of preferred trust securities may give any required approval at a
meeting convened for that purpose or by written consent without prior notice
(Trust Agreement, Section 6.06). The administrative trustees will give notice of
any meeting at which holders of preferred trust securities are entitled to vote
(Trust Agreement, Section 6.02).
No vote or consent of the holders of preferred trust securities will be
required for TXU Gas Capital to redeem and cancel preferred trust securities in
accordance with the trust agreement.
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Although holders of preferred trust securities are entitled to vote or
consent under any of the circumstances described above, any of preferred trust
securities that are owned by TXU Gas Company, any trustee under the trust
agreement or any affiliate of TXU Gas Company, will be treated as if they were
not outstanding for purposes of that vote or consent (Trust Agreement, Section
1.01).
Unless an Event of Default under the subordinated indenture has occurred
and is continuing, holders of preferred trust securities will have no rights to
appoint or remove the administrative trustees of TXU Gas Capital, who may be
appointed, removed or replaced solely by TXU Gas Company as the holder of the
common trust securities (Trust Agreement, Section 8.10).
AMENDMENTS
The trust agreement may be amended from time to time by TXU Gas Capital
and TXU Gas Company without the consent of any holders of preferred trust
securities and common trust securities:
( ) To cure any ambiguity, correct inconsistent provisions, make any
other provisions with respect to matters or questions arising under
the trust agreement that do not conflict with the other provisions of
the trust agreement or any amendments of the trust agreement, or to
change the name of the trust; or
( ) To modify, eliminate or add to any provisions of the trust agreement
to the extent necessary to ensure that TXU Gas Capital will not be
classified as an association taxable as a corporation for United
States federal income tax purposes at any time that any preferred
trust securities and common trust securities are outstanding or to
ensure TXU Gas Capital's exemption from the status of an "investment
company" under the Investment Company Act of 1940.
No amendment described above may materially adversely affect the interests of
any holder of preferred trust securities and common trust securities. The
amendments to the trust agreement which cure ambiguity, correct inconsistencies
or supplement existing provisions will become effective when notice of the
amendment is given to the holders of preferred trust securities and common trust
securities (Trust Agreement, Section 10.03(a)).
Except as provided below, any provision of the trust agreement may be
amended by the administrative trustees and TXU Gas Company with:
( ) The consent of holders of preferred trust securities and common trust
securities representing not less than a majority of the total
liquidation preference amount of the preferred trust securities and
common trust securities then outstanding; and
( ) Receipt by the trustees of an opinion of counsel to the effect that
the amendment or the exercise of any power granted to the trustees in
accordance with the amendment will not cause TXU Gas Capital to be
classified as an association taxable as a corporation for United
States federal income tax purposes or affect TXU Gas Capital's
exemption from status of an "investment company" under the Investment
Company Act (Trust Agreement, Section 10.03(b)).
Each holder of preferred trust securities or common trust securities must
consent to any amendment to the trust agreement that:
( ) Changes the amount or timing of any distribution with respect to
preferred trust securities or common trust securities or otherwise
adversely affects the amount of any distribution required to be made
in respect of preferred trust securities and common trust securities
as of a specified date; or
( ) Restricts the right of a holder of preferred trust securities and
common trust securities to institute suit for the enforcement of any
distribution on or after a specified date (Trust Agreement, Section
10.03(c)).
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CO-TRUSTEES AND SEPARATE TRUSTEE
If no Event of Default under the trust agreement has occurred and is
continuing, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the trust property of
TXU Gas Capital may at the time be located, TXU Gas Company and the property
trustee may appoint one or more persons approved by the property trustee either
to act as co-trustee, jointly with the property trustee, of all or any part of
the trust property, or to act as separate trustee of any trust property. Upon
the written request of the property trustee, TXU Gas Company will for that
purpose join with the property trustee in the execution, delivery and
performance of all instruments necessary or proper to make that appointment. The
appointment will vest in that person or persons in that capacity, any property,
title, right or power deemed necessary or desirable, subject to the provisions
of the trust agreement. If TXU Gas Company does not join in that appointment
within 15 days after the receipt by it of a request so to do, or in case an
Event of Default under the subordinated indenture has occurred and is
continuing, the property trustee alone will have power to make that appointment
(Trust Agreement, Section 8.09).
FORM, EXCHANGE, AND TRANSFER
Preferred trust securities of any TXU Gas Capital Trust may be exchanged
for other preferred trust securities of that trust in any authorized
denomination and with the same terms and total liquidation preference (Trust
Agreement, Section 5.04).
Subject to the terms of the trust agreement, preferred trust securities
may be presented for exchange as provided above or for registration of transfer,
duly endorsed or accompanied by a duly executed instrument of transfer, at the
office of the preferred trust security registrar or at the office of any
transfer agent designated by TXU Gas Company for that purpose. TXU Gas Company
may designate itself the preferred trust security registrar. No service charge
will be made for any registration of transfer or exchange of preferred trust
securities, but TXU Gas Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection with the transfer. In
that case, the holder requesting transfer must pay the tax or charges and give
any indemnity that TXU Gas Capital or TXU Gas Company may require (Trust
Agreement, Section 5.04). A transfer or exchange will be made when the transfer
agent is satisfied with the documents of title and identity of the person making
the request. TXU Gas Company may at any time designate additional transfer
agents or rescind the designation of any transfer agent or approve a change in
the office through which any transfer agent acts, except that TXU Gas Company
will be required to maintain a transfer agent in each place of payment for
preferred trust securities.
TXU Gas Capital will not be required to:
( ) Issue, register the transfer of, or exchange any preferred trust
securities during the 15 calendar days before the mailing of a notice
of redemption of any preferred trust securities called for redemption
and ending at the close of business on the day the notice is mailed;
or
( ) Register the transfer of or exchange any preferred trust securities
so selected for redemption, in whole or in part, except the
unredeemed portion of any preferred trust securities being redeemed
in part (Trust Agreement, Section 5.04).
REGISTRAR AND TRANSFER AGENT
TXU Business Services Company, an affiliate of TXU Gas Company, will act
as registrar and transfer agent for the preferred trust securities (Trust
Agreement, Section 5.04).
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CONCERNING THE PROPERTY TRUSTEE
The property trustee will be The Bank of New York, which also acts as
trustee under various indentures and trusts of TXU Gas Company, TXU Corp and
other affiliates, including the indentures for the debt securities described
above, and the junior subordinated debentures described below. TXU Gas Company,
TXU Corp and other affiliates maintain deposit accounts and credit and liquidity
facilities and conduct other banking transactions with the property trustee in
the ordinary course of their businesses. The property trustee also acts as the
guarantee trustee under the guarantee and the debenture trustee under the
subordinated indenture. The Delaware trustee will be The Bank of New York
(Delaware).
DUTIES OF THE TRUSTEES
The Delaware trustee will act as the resident trustee in the State of
Delaware and will have no other significant duties (Trust Agreement, Section
2.06). The property trustee will hold the junior subordinated debentures on
behalf of TXU Gas Capital and will maintain a payment account with respect to
the preferred trust securities and common trust securities, and will also act as
trustee under the trust agreement for the purposes of the Trust Indenture Act.
The administrative trustees of TXU Gas Capital are authorized and directed
to conduct the affairs of TXU Gas Capital and to operate TXU Gas Capital so that
TXU Gas Capital will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or taxed as a corporation for United
States federal income tax purposes and so that the junior subordinated
debentures will be treated as indebtedness of TXU Gas Company for United States
federal income tax purposes. In this regard, the administrative trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust or the trust agreement, that the administrative trustees
determine in their discretion to be necessary or desirable for those purposes,
as long as the action does not materially adversely affect the interests of the
holders of the preferred trust securities (Trust Agreement, Section 2.07(d)).
GOVERNING LAW
The trust agreement and the preferred trust securities will be governed
by, and construed in accordance with, the laws of the State of Delaware (Trust
Agreement, Section 10.05).
MISCELLANEOUS
Holders of the preferred trust securities have no preemptive or similar
rights (Trust Agreement, Section 5.13).
DESCRIPTION OF THE GUARANTEE
Material terms of the guarantee that TXU Gas Company will execute and
deliver for the benefit of the holders of the preferred trust securities are
summarized below. The form of guarantee was filed with the SEC and you should
read the guarantee for provisions that may be important to you. The guarantee
will be qualified as an indenture under the Trust Indenture Act. You should
refer to the Trust Indenture Act for provisions that apply to the guarantee.
Whenever particular provisions or defined terms of the guarantee are referred
to in this prospectus, those provisions or defined terms are incorporated in
this prospectus by reference.
The Bank of New York will act as guarantee trustee under the guarantee.
The Bank of New York also will act as the property trustee under the trust
agreement and the debenture trustee under the subordinated indenture. The
guarantee trustee will hold the guarantee for the benefit of the holders of the
preferred trust securities.
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GENERAL TERMS OF THE GUARANTEE
TXU Gas Company will irrevocably and unconditionally agree to make the
guarantee payments listed below in full to the holders of the preferred trust
securities if they are not made by TXU Gas Capital, as and when due, regardless
of any defense, right of set-off or counterclaim that TXU Gas Company may have
or assert. The following payments will be subject to the guarantee, without
duplication:
( ) Any accrued and unpaid distributions required to be paid on preferred
trust securities, to the extent TXU Gas Capital has sufficient funds
available for payments;
( ) The redemption price, plus all accrued and unpaid distributions, for
any preferred trust securities called for redemption by TXU Gas
Capital, to the extent TXU Gas Capital has sufficient funds available
for payments; and
( ) Upon a voluntary or involuntary dissolution, winding-up or
termination of TXU Gas Capital except in connection with (1) the
distribution of junior subordinated debentures to the holders in
exchange for preferred trust securities as provided in the trust
agreement or (2) the redemption of all of the preferred trust
securities upon maturity or redemption of the junior subordinated
debentures as provided in the trust agreement, the lesser of:
(1) the total liquidation preference amount of, and all accrued
and unpaid distributions on, preferred
trust securities to the date of payment; and
(2) the amount of assets of TXU Gas Capital remaining
available for distribution to holders of preferred
trust securities in liquidation of TXU Gas Capital
(Guarantee Agreement, Section 5.01).
TXU Gas Company's obligation to make a guarantee payment may be satisfied by
direct payment of the required amounts by TXU Gas Company to the holders of
preferred trust securities or by causing TXU Gas Capital to pay those amounts to
the holders (Guarantee Agreement, Section 5.01).
The guarantee will be a guarantee with respect to the preferred trust
securities, but will not apply to any payment of distributions if and to the
extent that TXU Gas Capital lacks the funds available to make those payments or
to any collection of payment.
If TXU Gas Company does not make interest payments on the junior
subordinated debentures held by TXU Gas Capital, TXU Gas Capital will not have
funds available to pay distributions on the preferred trust securities. The
guarantee will rank subordinate and junior in right of payment to all
liabilities of TXU Gas Company except liabilities that are equal in right of
payment by their terms (Guarantee Agreement, Section 6.01).
TXU Gas Company will enter into an agreement as to expenses and
liabilities with TXU Gas Capital, to provide funds to TXU Gas Capital as needed
to pay obligations of TXU Gas Capital to parties other than holders of preferred
trust securities. The junior subordinated debentures and the guarantee, together
with the obligations of TXU Gas Company with respect to the preferred trust
securities under the subordinated indenture, the trust agreement, the guarantee
and the agreement as to expenses and liabilities, constitute a full and
unconditional guarantee of the preferred trust securities by TXU Gas Company. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes that guarantee. It is only the combined
operation of these documents that has the effect of providing a full and
unconditional guarantee by TXU Gas Company of the preferred trust securities.
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AMENDMENTS AND ASSIGNMENT
No vote is required for changes to the trust agreement that do not
materially adversely affect the rights of holders of preferred trust securities.
Other terms of the guarantee may be changed only with the prior approval of the
holders of the preferred trust securities having at least 66 2/3% of the total
liquidation preference amount of the outstanding preferred trust securities
(Guarantee Agreement, Section 8.02). All guarantees and agreements contained in
the guarantee will bind the successors, assigns, receivers, trustees and
representatives of TXU Gas Company and will inure to the benefit of the holders
of the preferred trust securities then outstanding (Guarantee Agreement, Section
8.01).
EVENTS OF DEFAULT
An Event of Default under the guarantee will occur if TXU Gas Company
fails to perform any of its payment obligations under the guarantee (Guarantee
Agreement, Section 1.01). The holders of the preferred trust securities having a
majority of the total liquidation preference amount of the preferred trust
securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee under the guarantee
or to direct the exercise of any trust or power conferred upon the guarantee
trustee under the guarantee (Guarantee Agreement, Section 5.04).
If the guarantee trustee fails to enforce the guarantee, any holder of the
preferred trust securities may enforce the guarantee, or institute a legal
proceeding directly against TXU Gas Company to enforce the guarantee trustee's
rights under the guarantee without first instituting a legal proceeding against
TXU Gas Capital, the guarantee trustee or anyone else (Guarantee Agreement,
Section 5.04).
TXU Gas Company will be required to provide an annual statement to the
guarantee trustee about TXU Gas Company's performance of some of its obligations
under the guarantee and any default in its performance of the obligations.
TXU Gas Company will also be required to file annually with the guarantee
trustee an officer's certificate as to TXU Gas Company's compliance with all
conditions under the guarantee (Guarantee Agreement, Section 2.04).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee will undertake to perform only those duties
specifically described in the guarantee until a default occurs. After a default
under the guarantee, the guarantee trustee must exercise the same degree of care
in its duties as a prudent individual would exercise in the conduct of his or
her own affairs (Guarantee Agreement, Section 3.01(b)). Otherwise, the guarantee
trustee is under no obligation to exercise any of the powers vested in it by the
guarantee at the request of any holder of the preferred trust securities unless
it is offered reasonable indemnity against the costs, expenses and liabilities
that it might incur (Guarantee Agreement, Section 3.01(c)).
TERMINATION OF THE GUARANTEE
The guarantee will terminate and be of no further force and effect upon:
( ) Full payment of the redemption price, plus accrued and unpaid
distributions, for all the preferred trust securities;
( ) The distribution of junior subordinated debentures to holders of the
preferred trust securities in exchange for all of the preferred trust
securities; or
( ) Full payment of the amounts payable upon liquidation of TXU Gas
Capital.
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The guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of preferred trust securities must
restore payment of any sums paid under the preferred trust securities or the
guarantee (Guarantee Agreement, Section 7.01).
STATUS OF THE GUARANTEE
The guarantee will be an unsecured obligation of TXU Gas Company and will
rank:
( ) Subordinate and junior in right of payment to all liabilities of TXU
Gas Company, except any liabilities that are equal in right of
payment by their terms;
( ) Equal in right of payment with the most senior preferred or
preference stock that may be issued by TXU Gas Company and with any
guarantee that may be entered into by TXU Gas Company in respect of
any preferred or preference stock of any affiliate of TXU Gas
Company; and
( ) Senior to TXU Gas Company's common stock (Guarantee Agreement,
Section 6.01).
The trust agreement provides that by accepting preferred trust securities,
a holder agrees to the subordination provisions and other terms of the
guarantee.
The guarantee will be a guarantee of payment and not of collection
(Guarantee Agreement, Section 5.05). That is, the guaranteed party may institute
a legal proceeding directly against TXU Gas Company to enforce its rights under
the guarantee without first instituting a legal proceeding against anyone else.
GOVERNING LAW
The guarantee will be governed by, and construed in accordance, with the
laws of the State of New York (Guarantee Agreement, Section 8.06).
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
The junior subordinated debentures which the property trustee will hold on
behalf of TXU Gas Capital as trust assets will be subordinated obligations of
TXU Gas Company. The junior subordinated debentures will be issued under the
subordinated indenture.
Material terms of the junior subordinated debentures and the subordinated
indenture are summarized below. The subordinated indenture has been filed with
the SEC, and you should read the subordinated indenture for provisions that may
be important to you. The subordinated indenture will be qualified under the
Trust Indenture Act. You should refer to the Trust Indenture Act for provisions
that apply to the junior subordinated debentures. Whenever particular provisions
or defined terms in a subordinated indenture are referred to in this prospectus,
those provisions or defined terms are incorporated by reference in this
prospectus.
The subordinated indenture provides for the issuance of subordinated
debentures, including the junior subordinated debentures, and other subordinated
debt in an unlimited amount from time to time (Subordinated Indenture, Section
301). The junior subordinated debentures issued to TXU Gas Capital will
constitute a separate series of subordinated debentures under the subordinated
indenture.
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A prospectus supplement and an officer's certificate relating to the
junior subordinated debentures being offered will include specific terms
relating to that offering. These terms will include some or all of the
following:
( ) The title of the junior subordinated debentures;
( ) The total principal amount of the junior subordinated debentures;
( ) The dates on which the principal of the junior subordinated
debentures will be payable and how it will be paid;
( ) The interest rate or rates which the junior subordinated debentures
will bear, or how the rate or rates will be determined, the interest
payment dates for the junior subordinated debentures and the regular
record dates for interest payments;
( ) Any right to extend the interest payment periods for the junior
subordinated debentures;
( ) The percentage, if less than 100%, of the principal amount of the
junior subordinated debentures that will be payable if the maturity
of the junior subordinated debentures is accelerated;
( ) Any date or dates on which the junior subordinated debentures may be
redeemed at the option of TXU Gas Company and any restrictions on
those redemptions;
( ) Any sinking fund or other provisions that would obligate TXU Gas
Company to repurchase or otherwise redeem the junior subordinated
debentures;
( ) Any changes or additions to the Events of Default under the
subordinated indenture or changes or additions to the covenants of
TXU Gas Company under the subordinated indenture;
( ) If the junior subordinated debentures will be issued in denomination
other than $25;
( ) If payments on the junior subordinated debentures may be made in a
currency or currencies other than United States dollars; and
( ) Any other terms of the junior subordinated debentures not
inconsistent with the terms of the subordinated indenture
(Subordinated Indenture, Section 301).
The junior subordinated debentures of each series will be limited in total
principal amount to the sum of the total liquidation preference amount of the
preferred trust securities and the consideration paid by TXU Gas Company for the
common trust securities of the related TXU Gas Capital trust. The junior
subordinated debentures are unsecured, subordinated obligations of TXU Gas
Company which rank junior to all of TXU Gas Company's Senior Indebtedness
(Subordinated Indenture, Section 1501). Senior Indebtedness is defined in the
subordinated indenture to include all notes and other obligations including
guarantees of TXU Gas Company for borrowed money that is not subordinate or
junior in right of payment to any other indebtedness of TXU Gas Company unless
by its terms it is equal in right of payment to the junior subordinated
debentures. The obligations of TXU Gas Company under the guarantee and the
junior subordinated debentures will not be deemed to be Senior Indebtedness
(Subordinated Indenture, Section 101). The amounts payable as principal and
interest on the junior subordinated debentures will be sufficient to provide for
payment of distributions payable on preferred trust securities and common trust
securities.
If junior subordinated debentures are distributed to holders of preferred
trust securities in a dissolution of TXU Gas Capital, the junior subordinated
debentures will be issued in fully registered certificated form in the
denominations and integral multiples of the denominations in which the preferred
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trust securities have been issued, and they may be transferred or exchanged at
the offices of the debenture trustee (Subordinated Indenture, Section 201).
Payments of principal and interest on junior subordinated debentures will
be payable, the transfer of junior subordinated debentures will be registrable,
and junior subordinated debentures will be exchangeable for junior subordinated
debentures of the same series of other denominations of the same total principal
amount, at the corporate trust office of the debenture trustee in The City of
New York (Subordinated Indenture, Section 602). However, TXU Gas Company may
choose to make payment of interest by check mailed to the address of the persons
entitled to it and may require that the payment in full of principal with
respect to any junior subordinated debenture be made only upon surrender of the
junior subordinated debenture to the debenture trustee.
OPTIONAL REDEMPTION
For so long as TXU Gas Capital is the holder of all the related
outstanding junior subordinated debentures, the proceeds of any optional
redemption will be used by TXU Gas Capital to redeem preferred trust securities
and common trust securities in accordance with their terms.
The debenture trustee will give notice to the holders of any optional
redemption of junior subordinated debentures, not less than 30 nor more than 60
days before that redemption. All notices of redemption will state the redemption
date and the redemption price plus accrued and unpaid interest. If less than all
the junior subordinated debentures are to be redeemed, the notice will identify
those to be redeemed and the portion of the principal amount of any junior
subordinated debentures to be redeemed in part. The notice will state that on
the redemption date, subject to the debenture trustee's receipt of the
redemption monies, the redemption price plus accrued and unpaid interest will
become due and payable on each junior subordinated debenture to be redeemed and
that interest will cease to accrue on and after that date. It will name the
place or places where the junior subordinated debentures are to be surrendered
for payment of the redemption price plus accrued and unpaid interest
(Subordinated Indenture, Section 404).
INTEREST
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 (Subordinated
Indenture, Section 310). If any date on which interest is payable on the junior
subordinated debentures is not a business day, then payment will be made on the
next business day. No interest will be paid in respect of any such delay.
However, if the delayed payment date is in the next calendar year, the payment
will be made on the last business day of the earlier year. These payments will
have the same force and effect as if made on the date the payment was originally
payable (Subordinated Indenture, Section 113).
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as there is no default in the payment of interest on the junior
subordinated debentures, TXU Gas Company may extend the interest payment period
from time to time on the junior subordinated debentures for one or more periods
(Subordinated Indenture, Section 311). As a consequence, distributions on
preferred trust securities would be deferred during any extension period.
Interest would, however, continue to accrue. If TXU Gas Company extends the
interest period or is in default under the guarantee or with respect to payments
on the junior subordinated debentures, TXU Gas Company may not:
( ) Declare or pay any dividend or distribution on its capital stock,
other than dividends paid in shares of common stock of TXU Gas
Company;
( ) Redeem, purchase, acquire or make a liquidation payment with
respect to any of its capital stock;
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( ) Redeem any indebtedness that is equal in right of payment with the
junior subordinated debentures; or
( ) Make any guarantee payments with respect to any of the above
(Subordinated Indenture, Section 608).
Any extension period with respect to payment of interest on the junior
subordinated debentures, or any extension period in respect of other securities
issued under the subordinated indenture or on any similar securities, will apply
to all securities of the same type. Those extensions will also apply to
distributions on preferred trust securities and common trust securities and all
other securities with terms substantially the same as preferred trust securities
and common trust securities. Before an extension period ends, TXU Gas Company
may further extend the interest payment period. No extension period as further
extended may exceed 20 consecutive quarters. After any extension period and the
payment of all amounts then due, TXU Gas Company may select a new extension
period. No interest period may be extended beyond the maturity of the junior
subordinated debentures. TXU Gas Company will give TXU Gas Capital and the
debenture trustee notice of its election of an extension period before the
earlier of (1) one business day before the record date for the distribution
which would occur if TXU Gas Company did not make the election to extend or (2)
the date TXU Gas Company is required to give notice to the New York Stock
Exchange or any other applicable self-regulatory organization of the record
date. TXU Gas Company will cause TXU Gas Capital to send notice of that election
to the holders of preferred trust securities.
ADDITIONAL INTEREST
So long as any preferred trust securities remain outstanding, if TXU Gas
Capital is required to pay any taxes, duties, assessments or governmental
charges imposed by the United States or any other taxing authority on income
derived from the interest payments on the junior subordinated debentures, then
TXU Gas Company will pay as interest on the junior subordinated debentures any
additional interest that may be necessary in order that the net amounts retained
by TXU Gas Capital after the payment of those taxes, duties, assessments or
governmental charges will be the same as TXU Gas Capital would have had in the
absence of the payment of those taxes, duties, assessments or governmental
charges (Subordinated Indenture, Section 312).
DEFEASANCE
TXU Gas Company will be discharged from its obligations on the
subordinated debentures of a particular series if it deposits with the debenture
trustee sufficient cash or government securities to pay the principal, interest,
any premium and any other sums when due on the stated maturity date or a
redemption date of that series of the subordinated debentures (Subordinated
Indenture, Section 701).
SUBORDINATION
The junior subordinated debentures will be subordinate and junior in right
of payment to all Senior Indebtedness of TXU Gas Company (Subordinated
Indenture, Section 1501). No payment of the principal of the junior subordinated
debentures, including redemption and sinking fund payments, or interest on the
junior subordinated debentures may be made until all holders of Senior
Indebtedness have been paid, if any of the following occurs:
( ) Specified events of bankruptcy, insolvency or reorganization of TXU
Gas Company;
( ) Any Senior Indebtedness is not paid when due and that default
continues without waiver;
( ) Any other default has occurred and continues without waiver,
permitting the holders of Senior Indebtedness to accelerate the
maturity of that indebtedness; or
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( ) The maturity of any other series of subordinated debentures under the
subordinated indenture has been accelerated, because of an Event of
Default under the subordinated indenture which remains uncured
(Subordinated Indenture, Section 1502).
Upon any distribution of assets of TXU Gas Company to creditors in
connection with any insolvency, bankruptcy or similar proceeding, all principal
of, and premium, if any, and interest due or to become due on all Senior
Indebtedness must be paid in full before the holders of the junior subordinated
debentures are entitled to receive or retain any payment (Subordinated
Indenture, Section 1504).
The subordinated indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued. As of June 30, 1999 TXU Gas Company had
approximately $701 million principal amount of indebtedness for borrowed money
constituting Senior Indebtedness.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Under the terms of the subordinated indenture, TXU Gas 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:
( ) The surviving or successor entity is organized and validly existing
under the laws of any domestic jurisdiction and it expressly assumes
TXU Gas Company's obligations on all subordinated debentures issued
under the subordinated indenture;
( ) Immediately after giving effect to the transaction, no Event of
Default under the subordinated indenture or no event which, after
notice or lapse of time or both, would become an Event of Default
under the subordinated indenture, occurs and is continuing; and
( ) TXU Gas Company delivers to the debenture trustee an officer's
certificate and an opinion of counsel as provided in the subordinated
indenture (Subordinated Indenture, Section 1101).
EVENTS OF DEFAULT
"Event of Default", when used in the subordinated indenture for
subordinated debentures of a specific series, will mean any of the following:
( ) Failure to pay interest on any subordinated debenture of that series
for 30 days after it is due;
( ) Failure to pay the principal of or any premium on any subordinated
debenture of that series when due;
( ) Failure to perform any other covenant in the subordinated indenture,
other than a covenant that does not relate to subordinated debentures
of that series, that continues for 90 days after TXU Gas Company
receives written notice from the debenture trustee or TXU Gas Company
and the debenture trustee receive a written notice from 33% of the
holders of the subordinated debentures of that series;
( ) Specified events in bankruptcy, insolvency or reorganization of TXU
Gas Company; or
( ) Any other Event of Default included in any supplemental indenture or
officer's certificate for that series of subordinated debentures
(Subordinated Indenture, Section 801).
An Event of Default under the subordinated indenture for a particular
series of subordinated debentures does not necessarily constitute an Event of
Default under the subordinated indenture for any other series of subordinated
debentures issued under the subordinated indenture. The debenture trustee may
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withhold notice to the holders of subordinated debentures of any default
except a default in the payment of principal or interest if it considers
the withholding of notice to be in the best interests of the holders.
REMEDIES
If an Event of Default under the subordinated indenture for any series of
subordinated debentures occurs and continues, the debenture trustee or the
holders of at least 33% in aggregate principal amount of the subordinated
debentures of the series may declare the entire principal amount of all the
subordinated debentures of that series, together with accrued interest, to be
due and payable immediately. However, if the Event of Default under the
subordinated indenture is applicable to all outstanding subordinated debentures
under the subordinated indenture, only the debenture trustee or holders of at
least 33% in aggregate principal amount of all outstanding subordinated
debentures of all series, voting as one class, and not the holders of any one
series, may make that declaration of acceleration (Subordinated Indenture,
Section 802).
At any time after a declaration of acceleration with respect to the
subordinated debentures of any series has been made and before a judgment or
decree for payment of the money due has been obtained, the Event of Default
under the subordinated indenture giving rise to the declaration of acceleration
will be considered waived, and the declaration and its consequences will be
considered rescinded and annulled, if:
( ) TXU Gas Company has paid or deposited with the debenture trustee a sum
sufficient to pay:
(1) all overdue interest on all subordinated debentures of the series;
(2) the principal of and premium, if any, on any subordinated debentures
of the series which have otherwise become due and interest that is
currently due;
(3) interest on overdue interest; and
(4) all amounts due to the debenture trustee under the subordinated
indenture; and
( ) Any other Event of Default under the subordinated indenture with
respect to the subordinated debentures of that series has been cured
or waived as provided in the subordinated indenture (Subordinated
Indenture, Section 802).
There is no automatic acceleration, even in the event of bankruptcy,
insolvency or reorganization of TXU Gas Company.
Other than its duties in case of an Event of Default under the
subordinated indenture, the debenture trustee is not obligated to exercise any
of its rights or powers under the subordinated indenture at the request, order
or direction of any of the holders, unless the holders offer the debenture
trustee a reasonable indemnity. If they provide this reasonable indemnity, the
holders of a majority in principal amount of any series of subordinated
debentures will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the debenture trustee or
exercising any power conferred upon the debenture trustee. However, if the Event
of Default under the subordinated indenture relates to more than one series,
only the holders of a majority in aggregate principal amount of all affected
series will have the right to give this direction. The debenture trustee is not
obligated to comply with directions that conflict with law or other provisions
of the subordinated indenture (Subordinated Indenture, Section 812).
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No holder of subordinated debentures of any series will have any right to
institute any proceeding under the subordinated indenture, or any remedy under
the subordinated indenture, unless:
( ) The holder has previously given to the debenture trustee written
notice of a continuing Event of Default under the subordinated
indenture;
( ) The holders of a majority in aggregate principal amount of the
outstanding subordinated debentures of all series in respect of which
an Event of Default under the subordinated indenture will have
occurred and be continuing have made a written request to the
debenture trustee, and have offered reasonable indemnity to the
debenture trustee to institute proceedings; and
( ) The debenture trustee has failed to institute any proceeding for 60
days after notice (Subordinated Indenture, Section 807).
However, these limitations do not apply to a suit by a holder of a subordinated
debenture for payment of the principal, premium or interest on a subordinated
debenture on or after the applicable due date (Subordinated Indenture, Section
808).
TXU Gas Company will provide to the debenture trustee an annual statement
by an appropriate officer as to TXU Gas Company's compliance with all conditions
and covenants under the subordinated indenture (Subordinated Indenture, Section
606).
ENFORCEMENT OF RIGHTS BY HOLDERS OF PREFERRED TRUST SECURITIES
If there is an Event of Default under the subordinated indenture, then the
holders of preferred trust securities will rely on the property trustee or the
debenture trustee, acting for the benefit of the property trustee, to enforce
the property trustee's rights against TXU Gas Company as a holder of the junior
subordinated debentures. However, a holder of preferred trust securities may
enforce the subordinated indenture directly against TXU Gas Company to the same
extent as if the holder of preferred trust securities held a principal amount of
junior subordinated debentures equal to the aggregate liquidation preference
amount of its preferred trust securities (Subordinated Indenture, Section 610).
The holders of preferred trust securities would not be able to exercise
directly against TXU Gas Company any other rights unless the property trustee or
the debenture trustee failed to do so for 60 days. Upon that failure, the
holders of a majority of the aggregate liquidation preference amount of the
outstanding preferred trust securities would have the right to directly
institute proceedings for enforcement of all other rights against TXU Gas
Company to the fullest extent permitted by law (Subordinated Indenture, Section
807).
MODIFICATION AND WAIVER
Without the consent of any holder of subordinated debentures, TXU Gas
Company and the debenture trustee may enter into one or more supplemental
indentures for any of the following purposes:
( ) To evidence the assumption by any permitted successor of the
covenants of TXU Gas Company in the subordinated indenture and in the
subordinated debentures;
( ) To add additional covenants of TXU Gas Company or to surrender any
right or power of TXU Gas Company under the subordinated indenture;
( ) To add additional Events of Default under the subordinated indenture;
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( ) To change or eliminate or add any provision to the subordinated
indenture; provided, however, if the change will adversely affect the
interests of the holders of subordinated debentures of any series in
any material respect, the change, elimination or addition will become
effective only:
(1) when the consent of the holders of subordinated debentures of
that series has been obtained in accordance with the
subordinated indenture; or
(2) when no subordinated debentures of the affected series remain
outstanding under the subordinated indenture;
( ) To provide collateral security for all but not part of the
subordinated debentures;
( ) To establish the form or terms of subordinated debentures of any
other series as permitted by the subordinated indenture;
( ) To provide for the authentication and delivery of bearer securities
with or without coupons;
( ) To evidence and provide for the acceptance of appointment of a
successor trustee;
( ) To provide for the procedures required for use of a noncertificated
system of registration for the subordinated debentures of all or any
series;
( ) To change any place where principal, premium and interest will be
payable, subordinated debentures may be surrendered for registration
of transfer or exchange and notices to TXU Gas Company may be served;
or
( ) To cure any ambiguity or inconsistency or to make any other
provisions with respect to matters and questions arising under the
subordinated indenture; provided that the action will not adversely
affect the interests of the holders of subordinated debentures of any
series in any material respect (Subordinated Indenture, Section
1201).
The holders of at least a majority in aggregate principal amount of the
subordinated debentures of all series then outstanding may waive compliance by
TXU Gas Company with some restrictive provisions of the subordinated indenture
(Subordinated Indenture, Section 607). The holders of not less than a majority
in principal amount of the outstanding subordinated debentures of any series may
waive any past default under the subordinated indenture with respect to that
series, except a default in the payment of principal, premium, if any, or
interest and some covenants and provisions of the subordinated indenture that
cannot be modified or be amended without the consent of the holder of each
outstanding subordinated debenture of the series affected (Subordinated
Indenture, Section 813).
If the Trust Indenture Act is amended after the date of the subordinated
indenture in a way as to require changes to the subordinated indenture, the
subordinated indenture will be deemed to be amended so as to conform to that
amendment of the Trust Indenture Act. TXU Gas Company and the debenture trustee
may, without the consent of any holders, enter into one or more supplemental
indentures to evidence the amendment (Subordinated Indenture, Section 1201).
The consent of the holders of a majority in aggregate principal amount of
the subordinated debentures of all series then outstanding is required for all
other modifications to the subordinated indenture. However, if less than all of
the series of subordinated debentures outstanding are directly affected by a
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proposed supplemental indenture, then the consent only of the holders of a
majority in aggregate principal amount of all series that are directly
affected will be required. No amendment or modification may:
( ) Change the stated maturity of the principal of, or any installment of
principal of or interest on any subordinated debenture, or reduce the
principal amount of any subordinated debenture or its rate of
interest or change the method of calculating the interest rate or
reduce any premium payable upon redemption, or change the currency in
which payments are made, or impair the right to institute suit for
the enforcement of any payment on or after the stated maturity of any
subordinated debenture, without the consent of the holder;
( ) Reduce the percentage in principal amount of the outstanding
subordinated debentures of any series whose consent is required for
any supplemental indenture, or any waiver of compliance with a
provision of the subordinated indenture or any default thereunder and
its consequences, or reduce the requirements for quorum or voting,
without the consent of all the holders of the series; or
( ) Modify some of the provisions of the subordinated indenture relating
to supplemental indentures, waivers of some covenants and waivers of
past defaults with respect to the subordinated debentures of any
series, without the consent of the holder of each outstanding
subordinated debenture affected by them (Subordinated Indenture,
Section 1202).
A supplemental indenture which changes the subordinated indenture solely
for the benefit of one or more particular series of subordinated debentures, or
modifies the rights of the holders of subordinated debentures of one or more
series, will not affect the rights under the subordinated indenture of the
holders of the subordinated debentures of any other series. So long as any of
preferred trust securities remain outstanding, the debenture trustee may not
consent to a supplemental indenture without the prior consent of the holders of
a majority in aggregate liquidation of all preferred trust securities or, in the
case of changes described in the clauses immediately above, 100% in aggregate
liquidation preference of all preferred trust securities then outstanding which
would be affected (Subordinated Indenture, Section 1202).
The subordinated indenture provides that subordinated debentures owned by
TXU Gas Company or anyone else required to make payments on the subordinated
debentures will be disregarded and considered not to be outstanding in
determining whether the required holders have given a request or consent
(Subordinated Indenture, Section 101).
TXU Gas Company may fix in advance a record date to determine the required
number of holders entitled to give any request, demand, authorization,
direction, notice, consent, waiver or other act of holders, but TXU Gas Company
will have no obligation to do so. If TXU Gas Company fixes a record date, the
request, demand, authorization, direction, notice, consent, waiver or other act
of the holders may be given before or after that record date, but only the
holders of record at the close of business on the record date will be considered
to be holders for the purposes of determining whether holders of the required
percentage of the outstanding subordinated debentures have authorized or agreed
or consented to the request, demand, authorization, direction, notice, consent,
waiver or other act of the holders. For that purpose the outstanding
subordinated debentures 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 subordinated debenture and
the holder of every subordinated debenture issued upon the registration of
transfer of or exchange of subordinated debentures. A transferee will be bound
by acts of the debenture trustee or TXU Gas Company in reliance on those acts
whether or not notation of that action is made upon the subordinated debenture
(Subordinated Indenture, Section 104).
RESIGNATION OF DEBENTURE TRUSTEE
The debenture trustee may resign at any time by giving written notice to
TXU Gas Company or may be removed at any time by act of the holders of a
majority in principal amount of all series of subordinated debentures
-29-
<PAGE>
then outstanding delivered to the debenture trustee and TXU Gas Company. No
resignation or removal of the debenture trustee and no appointment of a
successor trustee will be effective until the acceptance of appointment by a
successor trustee. So long as no Event of Default under the subordinated
indenture or event which, after notice or lapse of time, or both, would become
an Event of Default under the subordinated indenture has occurred and is
continuing and except with respect to a trustee appointed by act of the holders,
if TXU Gas Company has delivered to the debenture trustee a resolution of its
Board of Directors appointing a successor trustee and the successor has accepted
that appointment in accordance with the terms of the respective subordinated
indenture, the debenture trustee will be deemed to have resigned and the
successor will be deemed to have been appointed as trustee in accordance with
the subordinated indenture (Subordinated Indenture, Section 910).
NOTICES
Notices to holders of subordinated debentures will be given by mail to the
addresses of the holders as they may appear in the security register for the
subordinated debentures (Subordinated Indenture, Section 106).
TITLE
TXU Gas Company, the debenture trustee, and any agent of TXU Gas Company
or the debenture trustee, may treat the person in whose name any subordinated
debenture is registered as the absolute owner of the subordinated debenture,
whether or not the subordinated debenture may be overdue, for the purpose of
making payments and for all other purposes irrespective of notice to the
contrary (Subordinated Indenture, Section 308).
GOVERNING LAW
The subordinated indenture and the subordinated debentures will be
governed by, and construed in accordance with, the laws of the State of New York
(Subordinated Indenture, Section 112).
CONCERNING THE DEBENTURE TRUSTEE
The debenture trustee under the subordinated indenture will be The Bank of
New York. In addition to acting as debenture trustee, The Bank of New York will
act as property trustee under the trust agreement and as guarantee trustee under
the guarantee. Its affiliate, The Bank of New York (Delaware), will act as the
Delaware trustee under the trust agreement. In addition, The Bank of New York
acts, and may act, as trustee under various indentures and trusts of TXU Gas
Company, TXU Corp and other affiliates. TXU Gas Company, TXU Corp and other
affiliates maintain deposit accounts and credit and liquidity facilities and
conduct other banking transactions with the debenture trustee in the ordinary
course of their businesses.
PLAN OF DISTRIBUTION
The debt securities and the preferred trust securities described in this
prospectus may be offered (a) through agents; (b) through underwriters or
dealers; or (c) directly to purchasers.
BY AGENTS
The debt securities and preferred trust securities may be sold through
agents designated by TXU Gas Company.
-30-
<PAGE>
BY UNDERWRITERS
If underwriters are used in any sale of debt securities or preferred trust
securities, the underwriters will acquire the securities sold for their own
account. The underwriters may resell those securities in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Underwriters may sell
the securities directly or through underwriting syndicates represented by
managing underwriters. The obligations of the underwriters to purchase the
securities will be subject to specific conditions. The underwriters in any
underwritten offering will be obligated to purchase all the offered securities
if any are purchased. If a dealer is used in the sale, TXU Gas Company or TXU
Gas Capital will sell the securities to the dealer as principal. The dealer may
then resell the securities at varying prices determined at the time of resale.
DIRECT SALES
Debt securities and preferred trust securities may also be sold directly
by TXU Gas Company. In that case, no underwriters or agents would be involved.
GENERAL INFORMATION
Underwriters, dealers and agents that participate in any distribution of
debt securities or preferred trust securities may be underwriters as defined in
the Securities Act and any discounts or commissions received by them from TXU
Gas Company or TXU Gas Capital and any profit on the resale by them of those
securities may be treated as underwriting discounts under the Securities Act.
Any underwriters, dealers or agents will be identified and their compensation
described in a prospectus supplement.
TXU Gas Company or TXU Gas Capital may authorize agents and underwriters
to solicit offers by specified institutions to purchase debt securities or
preferred trust securities at the public offering price and on terms described
in the applicable prospectus supplement.
TXU Gas Company may have agreements with agents, underwriters and dealers
to indemnify them against specified civil liabilities, including liabilities
under the Securities Act, or to contribute with respect to payments which the
agents, underwriters, dealers and remarketing firms may be required to make.
Neither the debt securities nor the preferred trust securities has an
established trading market. TXU Gas Company may decide to list any series of
those securities on an exchange. However, TXU Gas Company will not be obligated
to list securities on an exchange unless it states otherwise in a prospectus
supplement. TXU Gas Company cannot assure that there will be any liquidity of
the trading market for any series of debt securities or preferred trust
securities.
Agents, underwriters and dealers may engage in transactions with, or
perform services for, TXU Gas Company or its subsidiaries in the ordinary course
of business.
EXPERTS AND LEGALITY
The consolidated financial statements included in the latest Annual Report
of TXU Gas Company on Form 10-K, incorporated in this prospectus by reference,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report included in the latest Annual Report of TXU Gas Company on Form
10-K, and have been incorporated by reference in this prospectus in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
-31-
<PAGE>
With respect to any unaudited condensed consolidated interim financial
information included in TXU Gas Company's Quarterly Reports on Form 10-Q which
are or will be incorporated in this prospectus by reference, Deloitte & Touche
LLP has applied limited procedures in accordance with professional standards for
reviews of that information. As stated in any of their reports included in TXU
Gas Company's Quarterly Reports on Form 10-Q, which are or will be incorporated
in this prospectus by reference, Deloitte & Touche LLP did not audit and did not
express an opinion on that interim financial information. Accordingly, the
degree of reliance on the reports on that 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 any of their reports on the unaudited condensed consolidated interim
financial information because those reports are not "reports" or a "part" of the
registration statement filed under the Securities Act with respect to the debt
securities or preferred trust securities prepared or certified by an accountant
within the meaning of Sections 7 and 11 of the Securities Act.
Matters of Delaware law relating to the validity of the preferred trust
securities, the enforceability of the trust agreement and the creation of TXU
Gas Capital are being passed upon by Richards, Layton & Finger, P.A., Special
Delaware counsel for TXU Gas Company and TXU Gas Capital. The legality of the
other securities offered in this prospectus will be passed upon for TXU Gas
Company and TXU Gas Capital by Worsham, Forsythe & Wooldridge, L.L.P., Dallas,
Texas, and by Thelen Reid & Priest LLP, New York, New York, and for the
underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York.
However, all matters pertaining to incorporation of TXU Gas Company and all
other matters of Texas law will be passed upon only by Worsham, Forsythe &
Wooldridge, L.L.P. At June 30, 1999, members of the firm of Worsham, Forsythe &
Wooldridge, L.L.P. owned approximately 41,000 shares of the common stock of TXU
Corp, which owns all of the common stock of TXU Gas Company.
-32-
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by TXU Gas Company in
connection with the issuance and distribution of the securities to be
registered.
Filing fee - Securities and Exchange Commission............ $139,000
Fees of Trustees........................................... 30,000
Fees of TXU Gas Company's counsel
Worsham, Forsythe & Wooldridge, L.L.P.................. 200,000
Thelen Reid & Priest LLP............................... 200,000
Fees of TXU Gas Company's and TXU Gas Capital's
Special Delaware counsel............................... 10,000
Auditors' fees............................................. 50,000
Rating agencies' fees...................................... 150,000
Printing, including Registration Statement,
prospectuses, exhibits, etc............................ 60,000
Miscellaneous..................................... 11,000
--------
Total expenses*............................................ $850,000
========
- ------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act permits TXU Gas
Company, in certain circumstances, to indemnify any present or former director,
officer, employee or agent of TXU Gas 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 that 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 TXU
Gas Company.
Article Eight of the Restated Articles of Incorporation of TXU Gas Company,
as amended, provides as follows:
"No director of this Corporation will be liable to this Corporation or its
shareholders for monetary damages for an act or omission in such director's
capacity as a director of this Corporation, except this Article Eight does not
eliminate or limit the liability of a director of this Corporation for (1) a
breach of the director's duty of loyalty to this Corporation or its
shareholders, (2) an act or omission not in good faith or that involves
intentional misconduct or a knowing violation of the law, (3) a transaction from
which the director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the director's office, (4) an
act or omission for which the liability of the director is expressly provided
for by statute, or (5) an act related to an unlawful stock repurchase or payment
of a dividend."
II-1
<PAGE>
Section 1 of Article XIII of TXU Gas Company's Bylaws is as follows:
"Section 1. The corporation shall indemnify any person who (1) is or was a
director, officer, employee or agent of the corporation, or (2) while a
director, officer, employee or agent of the corporation, its divisions or
subsidiaries, is or was serving at the request of the corporation, pursuant to a
resolution adopted by the Board of Directors, as a director, officer, partner,
venturer, proprietor, Trustee, employee, agent or similar functionary of another
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, to the fullest
extent that a corporation may or is required to grant indemnification to a
director under the Texas Business Corporation Act. The corporation, pursuant to
a resolution adopted by the Board of Directors, may indemnify any such person to
such further extent as permitted by law."
TXU Gas Company has entered into agreements with certain of its officers
and directors which provide, among other things, for their indemnification by
TXU Gas Company to the fullest extent permitted by Texas law.
TXU Gas Company 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 TXU Gas Company also
have insurance which insures them against certain other liabilities and
expenses.
II-2
<PAGE>
ITEM 16. EXHIBITS.
PREVIOUSLY FILED*
------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
- ------- ------- -------
1(a) -- Form of Underwriting Agreement for TXU Gas
Company Securities.
1(b) -- Form of Underwriting Agreement for Preferred
Trust Securities.
4(a) 1-3183 3(a) -- Amended and Restated Articles of Incorporation
Form 10-Q of TXU Gas Company, as amended.
(Quarter
ended June
30, 1999)
4(b) 1-3183 3(b) -- Bylaws of TXU Gas Company, as amended.
Form 10-Q
(Quarter
ended June
30, 1999)
4(c) 1-1283 4(kk) -- Indenture (For Unsecured Debt Securities),
Form 10-K dated as of January 1, 1998 between ENSERCH
(1997) Corporation (now TXU Gas Company) and The Bank
of New York.
4(d) -- Form of Officer's Certificate establishing a
series of unsecured debt securities, including
Form of Debt Security.
4(e) -- Trust Agreement and Certificate of Trust of
TXU Gas Capital II.
4(f) -- Trust Agreement and Certificate of Trust of
TXU Gas Capital III.
4(g) -- Trust Agreement and Certificate of Trust of
TXU Gas Capital IV.
4(h) -- Form of Amended and Restated Trust Agreement.
4(i) 1-12833 4(a) -- Indenture (For Unsecured Subordinated Debt
Form 8-K Securities) as of June 1, 1998, between
Gas (filed ENSERCH Corporation (now TXU Company) and
August 28, The Bank of New York.
1998)
4(j) -- Form of Officer's Certificate establishing
the Junior Subordinated Debentures,
including Form of Junior Subordinated
Debenture.
4(k) -- Form of Guarantee Agreement relating to the
Preferred Trust Securities.
4(l) -- Form of Agreement as to Expenses and
Liabilities relating to the Preferred
Trust Securities is contained in Exhibit D
of Exhibit 4(h) hereto.
4(m) -- Form of Preferred Trust Securities is
contained in Exhibit C of Exhibit 4(h)
hereto.
5(a) -- Opinion of Worsham, Forsythe & Wooldridge,
L.L.P., General Counsel for TXU Gas Company.
5(b) -- Opinion of Thelen Reid & Priest LLP, of
counsel to TXU Gas Company.
5(c) -- Opinion of Richards, Layton & Finger, P.A.,
Special Delaware Counsel to TXU Gas Capital
II and TXU Gas Company.
5(d) -- Opinion of Richards, Layton & Finger, P.A.,
Special Delaware Counsel to TXU Gas Capital
III and TXU Gas Company.
5(e) -- Opinion of Richards, Layton & Finger, P.A.,
Special Delaware Counsel to TXU Gas Capital
IV and TXU Gas Company.
12(a) 1-3183 12 -- Computation of Ratio of Earnings to Fixed
Form 10-K Charges and Computation of Ratio of Earnings
(1998) to Combined Fixed Charges and Preferred
Dividends of TXU Gas Company for periods
ending prior to December 31, 1998.
II-3
<PAGE>
12(b) -- Computation of Ratio of Earnings to Fixed
Charges and Computation of Ratio of Earnings
to Combined Fixed Charges and Preferred
Dividends of TXU Gas Company for six months
ended June 30, 1999.
15 -- Letter of Deloitte & Touche LLP regarding
unaudited condensed interim financial
information.
23(a) -- Consent of Deloitte & Touche LLP.
23(b) -- Consents of Worsham, Forsythe & Wooldridge,
L.L.P., Thelen Reid & Priest LLP and Richards,
Layton and Finger, P.A. are contained in
Exhibits 5(a), 5(b) and 5(c)-5(e),
respectively.
24 -- Power of Attorney (see page II-6 and Section
4 of Exhibits 4(f), (g) and (h).
25(a) -- Statement of Eligibility on Form T-1 of The
Bank of New York relating to Indenture (For
Unsecured Debt Securities).
25(b) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Indenture (For Unsecured Subordinated Debt
Securities) of TXU Gas Company.
25(c) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the Amended
and Restated Trust Agreement of TXU Gas
Capital II.
25(d) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Guarantee Agreement relating to the
Preferred Trust Securities of TXU Gas
Capital II.
25(e) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the Amended
and Restated Trust Agreement of TXU Gas
Capital III.
25(f) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Guarantee Agreement relating to the
Preferred Trust Securities of TXU Gas
Capital III.
25(g) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the Amended
and Restated Trust Agreement of TXU Gas
Capital IV.
25(h) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Guarantee Agreement relating to the
Preferred Trust Securities of TXU Gas
Capital IV.
- ------------------------------------
* Incorporated by reference.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS.
a. The undersigned registrants hereby undertake:
(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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference 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. 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 15 above, or
otherwise, the registrants have 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 registrants of expenses incurred or paid by a director, officer or
controlling person of any 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 registrants 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.
II-5
<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 ON ITS
BEHALF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF DALLAS, AND STATE OF TEXAS, ON THE 23RD OF
AUGUST, 1999.
TXU GAS COMPANY
BY /S/ ERLE NYE
----------------------------------
(ERLE NYE, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/S/ ERLE NYE PRINCIPAL EXECUTIVE AUGUST 23, 1999
- ---------------------------------- OFFICER AND DIRECTOR
(ERLE NYE, CHAIRMAN OF THE
BOARD AND CHIEF EXECUTIVE)
/S/ KIRK R. OLIVER PRINCIPAL FINANCIAL AUGUST 23, 1999
- ---------------------------------- OFFICER
(KIRK R. OLIVER, TREASURER)
/S/ JERRY W. PINKERTON PRINCIPAL ACCOUNTING AUGUST 23, 1999
- ---------------------------------- OFFICER
(JERRY W. PINKERTON, CONTROLLER)
/S/ D.W. BIEGLER DIRECTOR AUGUST 23, 1999
- ----------------------------------
(D.W. BIEGLER)
/S/ BARBARA CURRY DIRECTOR AUGUST 23, 1999
- ----------------------------------
(BARBARA CURRY)
DIRECTOR
- ----------------------------------
(H. JARRELL GIBBS)
/S/ MICHAEL J. MCNALLY DIRECTOR AUGUST 23, 1999
- ----------------------------------
(MICHAEL J. MCNALLY)
/S/ ROBERT A. WOOLDRIDGE DIRECTOR AUGUST 23, 1999
- ----------------------------------
(ROBERT A. WOOLDRIDGE)
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, TXU Gas Capital
II certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, and State of New York on the 23rd day of
August, 1999.
TXU Gas Capital II
By: /s/ Robert J. Reger, Jr.
-------------------------------
Robert J. Reger, Jr.
Attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, TXU Gas Capital
III certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, and State of New York on the 23rd day of
August, 1999.
TXU Gas Capital III
By: /s/ Robert J. Reger, Jr.
-------------------------------
Robert J. Reger, Jr.
Attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, TXU Gas Capital
IV certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, and State of New York on the 23rd day of
August, 1999.
TXU Gas Capital IV
By: /s/ Robert J. Reger, Jr.
-------------------------------
Robert J. Reger, Jr.
Attorney-in-fact
II-7
<PAGE>
EXHIBIT INDEX
PREVIOUSLY FILED*
------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
- ------- ------- -------
1(a) -- Form of Underwriting Agreement for TXU Gas
Company Securities.
1(b) -- Form of Underwriting Agreement for Preferred
Trust Securities.
4(a) 1-3183 3(a) -- Amended and Restated Articles of Incorporation
Form 10-Q of TXU Gas Company, as amended.
(Quarter
ended June
30, 1999)
4(b) 1-3183 3(b) -- Bylaws of TXU Gas Company, as amended.
Form 10-Q
(Quarter
ended June
30, 1999)
4(c) 1-1283 4(kk) -- Indenture (For Unsecured Debt Securities),
Form 10-K dated as of January 1, 1998 between ENSERCH
(1997) Corporation (now TXU Gas Company) and The Bank
of New York.
4(d) -- Form of Officer's Certificate establishing a
series of unsecured debt securities, including
Form of Debt Security.
4(e) -- Trust Agreement and Certificate of Trust of
TXU Gas Capital II.
4(f) -- Trust Agreement and Certificate of Trust of
TXU Gas Capital III.
4(g) -- Trust Agreement and Certificate of Trust of
TXU Gas Capital IV.
4(h) -- Form of Amended and Restated Trust Agreement.
4(i) 1-12833 4(a) -- Indenture (For Unsecured Subordinated Debt
Form 8-K Securities) as of June 1, 1998, between
Gas (filed ENSERCH Corporation (now TXU Company) and
August 28, The Bank of New York.
1998)
4(j) -- Form of Officer's Certificate establishing
the Junior Subordinated Debentures,
including Form of Junior Subordinated
Debenture.
4(k) -- Form of Guarantee Agreement relating to the
Preferred Trust Securities.
4(l) -- Form of Agreement as to Expenses and
Liabilities relating to the Preferred
Trust Securities is contained in Exhibit D
of Exhibit 4(h) hereto.
4(m) -- Form of Preferred Trust Securities is
contained in Exhibit C of Exhibit 4(h)
hereto.
5(a) -- Opinion of Worsham, Forsythe & Wooldridge,
L.L.P., General Counsel for TXU Gas Company.
5(b) -- Opinion of Thelen Reid & Priest LLP, of
counsel to TXU Gas Company.
5(c) -- Opinion of Richards, Layton & Finger, P.A.,
Special Delaware Counsel to TXU Gas Capital
II and TXU Gas Company.
5(d) -- Opinion of Richards, Layton & Finger, P.A.,
Special Delaware Counsel to TXU Gas Capital
III and TXU Gas Company.
5(e) -- Opinion of Richards, Layton & Finger, P.A.,
Special Delaware Counsel to TXU Gas Capital
IV and TXU Gas Company.
12(a) 1-3183 12 -- Computation of Ratio of Earnings to Fixed
Form 10-K Charges and Computation of Ratio of Earnings
(1998) to Combined Fixed Charges and Preferred
Dividends of TXU Gas Company for periods
ending prior to December 31, 1998.
II-8
<PAGE>
12(b) -- Computation of Ratio of Earnings to Fixed
Charges and Computation of Ratio of Earnings
to Combined Fixed Charges and Preferred
Dividends of TXU Gas Company for six months
ended June 30, 1999.
15 -- Letter of Deloitte & Touche LLP regarding
unaudited condensed interim financial
information.
23(a) -- Consent of Deloitte & Touche LLP.
23(b) -- Consents of Worsham, Forsythe & Wooldridge,
L.L.P., Thelen Reid & Priest LLP and Richards,
Layton and Finger, P.A. are contained in
Exhibits 5(a), 5(b) and 5(c)-5(e),
respectively.
24 -- Power of Attorney (see page II-6 and Section
4 of Exhibits 4(f), (g) and (h).
25(a) -- Statement of Eligibility on Form T-1 of The
Bank of New York relating to Indenture (For
Unsecured Debt Securities).
25(b) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Indenture (For Unsecured Subordinated Debt
Securities) of TXU Gas Company.
25(c) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the Amended
and Restated Trust Agreement of TXU Gas
Capital II.
25(d) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Guarantee Agreement relating to the
Preferred Trust Securities of TXU Gas
Capital II.
25(e) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the Amended
and Restated Trust Agreement of TXU Gas
Capital III.
25(f) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Guarantee Agreement relating to the
Preferred Trust Securities of TXU Gas
Capital III.
25(g) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the Amended
and Restated Trust Agreement of TXU Gas
Capital IV.
25(h) -- Statement of Eligibility on Form T-1 of The
Bank of New York with respect to the
Guarantee Agreement relating to the
Preferred Trust Securities of TXU Gas
Capital IV.
- ------------------------------------
* Incorporated by reference.
II-9
EXHIBIT 1(a)
TXU GAS COMPANY
[Name of Security]
UNDERWRITING AGREEMENT
[Date]
as Representatives of the Underwriters
named in Schedule II hereto (the "Representatives")
c/o
Ladies and Gentlemen:
1. Introduction. TXU Gas Company, a Texas corporation (the
------------
"Company"), proposes to issue and sell severally to the underwriters named in
Schedule II hereto (the "Underwriters") the [Name of Security] of the
designation, with the terms and in the aggregate principal amount specified in
Schedule I hereto (the "Securities").
2. Description of Securities. The Securities are to be issued
-------------------------
pursuant to the provisions of an Indenture (For Unsecured Debt Securities),
dated as of January 1, 1998, between the Company and The Bank of New York, as
trustee (the "Indenture Trustee"), said Indenture, together with any amendments
or supplements thereto, being hereinafter referred to as the "Indenture".
3. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to the several Underwriters that:
(a) The Company and three of its financing subsidiaries (the
"Trusts") have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 on , 1999
(Registration Nos. 333- , 333- -01, 333- -02 and
333- -03) for the registration under the Securities Act of 1933,
as amended (the "Securities Act") of $500,000,000 aggregate amount of
(i) the Company's unsecured debt securities ("Debt Securities") and
(ii) the preferred trust securities of the Trusts, and a principal
amount of the Company's junior subordinated debentures and guarantees
and other obligations of the Company in respect of such preferred
trust securities. Such registration statement ("Registration Statement
No. 333- ") became effective on , 1999. The
Company has also filed with the Commission under the Securities Act, a
registration statement on Form S-3 on January 7, 1998 (Registration
Nos. 333-43811 and 333-43811-01) for the registration of $275,000,000
aggregate amount (i) the Company's Debt Securities and (ii) certain
trust securities of ENSERCH Capital I, which has been renamed TXU Gas
Capital I, and related securities of the Company, of which all but
$100,000,000 aggregate principal amount of the Company's Debt
Securities have been previously issued. Such registration
statement was declared effective by the Commission on January 13, 1998.
Such registration statement ("Registration Statement No. 333-43811")
was amended by Post-Effective Amendment No. 1, which was filed on
January 21, 1998 and became effective on January 23, 1998. References
herein to the term "Registration Statement" as of any date shall be
deemed to refer to each of Registration Statement Nos. 333- and
Registration Statement No. 333-43811, each as amended or supplemented
to such date, including all documents incorporated by reference therein
as of such date pursuant to Item 12 of Form S-3 ("Incorporated
Documents"). References herein to the term "Prospectus" as of any given
date shall be deemed to refer to the combined prospectus relating to
the securities registered under Registration Statement 333- and
the securities registered and remaining unissued under Registration
Statement 333-43811 that forms a part of Registration Statement No.
333- , as amended or supplemented as of such date (other than by
amendments or supplements relating to securities other than the
Securities), including all Incorporated Documents as of such date and
including any prospectus supplement relating to the Securities;
provided that if the Company files a registration statement with the
Commission pursuant to Rule 462(b) of the General Rules and Regulations
of the Securities Act Regulations (the "Rule 462(b) Registration
Statement"), then after such filing, all references to "Registration
Statement" shall be deemed to include the Rule 462(b) Registration
Statement. References herein to the term "Effective Date" shall be
deemed to refer to the time and date Registration Statement No.
333- or the Rule 462(b) Registration Statement, as the case
may be, was declared effective. The Company will not file any amendment
to the Registration Statement or supplement to the Prospectus on or
after the date of this Agreement and prior to the Closing Date, as
hereinafter defined, without prior notice to the Underwriters, or to
which Counsel for the Underwriters shall reasonably object in writing.
For the purposes of this Agreement, any Incorporated Document filed
with the Commission on or after the date of this Agreement and prior to
the Closing Date, as hereinafter defined, shall be deemed an amendment
or supplement to the Registration Statement and the Prospectus.
(b) On the Effective Date, the Registration Statement and the
Prospectus complied in all material respects and at the Closing Date,
as hereinafter defined, the Registration Statement, the Prospectus and
the Indenture will comply in all material respects with the applicable
provisions of the Securities Act, the Trust Indenture Act of 1939, as
amended ("Trust Indenture Act"), and the applicable rules and
regulations of the Commission thereunder; on the Effective Date the
Registration Statement did not, and at the Closing Date, as hereinafter
defined, the Registration Statement will not, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; on the Effective Date the Prospectus did not, and at the
Closing Date, as hereinafter defined, and on the date it is filed with
the Commission pursuant to Rule 424 of the General Rules and
Regulations of the Securities Act ("Rule 424"), the Prospectus will
not, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and on said dates the Incorporated Documents, taken together as a
whole, complied or will comply in all material respects with the
applicable provisions of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the applicable rules and regulations
of the Commission thereunder, and, when read together with the
Prospectus on said dates did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided that the foregoing representations and warranties
in this paragraph (b) shall not apply to statements or omissions made
in reliance upon information furnished in writing to the Company by, or
on behalf of, any Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus or to any
statements in or omissions from the Statements of Eligibility and
Qualification under the Trust Indenture Act, or amendments thereto,
filed as exhibits to the Registration Statement.
(c) The consummation of the transactions herein contemplated
and the fulfillment of the terms hereof will not result in a breach of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is now a party.
4. Purchase and Sale.
-----------------
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth,
the Company shall sell to each of the Underwriters, and each
Underwriter shall purchase from the Company, at the time and place
herein specified, severally and not jointly, the aggregate amount of
the Securities set forth opposite the name of such Underwriter in
Schedule II attached hereto, at the purchase price or prices set forth
in Schedule I hereto.
(b) The Company shall pay to the Underwriters a
commission equal to % of the aggregate principal amount
of the Securities.
5. Time and Place of Closing. Delivery of the Securities,
-------------------------
against payment of the aggregate purchase price therefor, plus accrued interest
thereon, if any, from the date of original issuance to the date of payment for
and delivery of the Securities by wire transfer in federal funds shall be made
at the offices of Thelen Reid & Priest LLP, 40 West 57th Street, New York, New
York, at 10:00 A.M., New York Time, on , or at such other place,
time and date as shall be agreed upon in writing by the Company and you or
established in accordance with the following paragraph. The hour and date of
such delivery and payment are herein called the "Closing Date". The Securities
shall be delivered [to The Depository Trust Company or to The Bank of New York,
as custodian for The Depository Trust Company, in fully registered global form
registered in the name of Cede & Co. for the respective accounts specified by
you not later than the close of business on the business day preceding the
Closing Date] [to you for the respective accounts of the several Underwriters,
registered in such names and in such denominations as you shall request in
writing not less than one full business day prior to the Closing Date]. The
Company agrees to make the Securities available to you for checking purposes
not later than 10:00 A.M., New York Time, on the last business day preceding
the Closing Date at the offices of Thelen Reid & Priest LLP, 40 West 57th
Street, New York, New York, 10019, or at such other place as the Company may
specify.
If any Underwriter shall fail or refuse (otherwise than for
some reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the principal amount of the Securities that such Underwriter has agreed to
purchase and pay for hereunder, the Company shall immediately give notice to the
other Underwriters of the default of such Underwriter, and the other
Underwriters shall have the right within 24 hours after the receipt of such
notice to determine to purchase, or to procure one or more others, who are
members of the National Association of Securities Dealers, Inc. ("NASD") (or, if
not members of the NASD, who are not eligible for membership in the NASD and who
agree (i) to make no sales within the United States, its territories or its
possessions or to persons who are citizens thereof or residents therein and (ii)
in making sales to comply with the NASD's Conduct Rules) and satisfactory to the
Company, to purchase, upon the terms herein set forth, the principal amount of
the Securities that the defaulting Underwriter had agreed to purchase. If any
non-defaulting Underwriter or Underwriters shall determine to exercise such
right, such Underwriter or Underwriters shall give written notice to the Company
of the determination in that regard within 24 hours after receipt of notice of
any such default, and thereupon the Closing Date shall be postponed for such
period, not exceeding three business days, as the Company shall determine. If in
the event of such a default no non-defaulting Underwriter shall give such
notice, then this Agreement may be terminated by the Company, upon like notice
given to the non-defaulting Underwriters, within a further period of 24 hours.
If in such case the Company shall not elect to terminate this Agreement it shall
have the right, irrespective of such default:
(a) to require each non-defaulting Underwriter to purchase and
pay for the respective number or amount of the Securities that it had
agreed to purchase hereunder as hereinabove provided and, in addition,
the principal amount of the Securities that the defaulting Underwriter
shall have so failed to purchase up to a principal amount thereof equal
to one-ninth (1/9) of the principal amount of Securities that such
non-defaulting Underwriter has otherwise agreed to purchase hereunder,
and/or
(b) to procure one or more persons, reasonably acceptable to
the Representatives, who are members of the NASD (or, if not members of
the NASD, who are not eligible for membership in the NASD and who agree
(i) to make no sales within the United States, its territories or its
possessions or to persons who are citizens thereof or residents therein
and (ii) in making sales to comply with the NASD's Conduct Rules), to
purchase, upon the terms herein set forth, either all or a part of the
principal amount of the Securities that such defaulting Underwriter
had agreed to purchase or that portion thereof that the remaining
Underwriters shall not be obligated to purchase pursuant to the
foregoing clause (a).
In the event the Company shall exercise its rights under (a) and/or (b) above,
the Company shall give written notice thereof to the non-defaulting Underwriters
within such further period of 24 hours, and thereupon the Closing Date shall be
postponed for such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred to in
this Section 5, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday that would otherwise be included in such
period of time.
Any action taken by the Company under this Section 5 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement. Termination by the Company under this
Section 5 shall be without any liability on the part of the Company or any
non-defaulting Underwriter, except as otherwise provided in Sections 6(g) and 9
hereof.
6. Covenants of the Company. The Company agrees that:
------------------------
(a) It will promptly deliver to each of you a signed copy of
the Registration Statement as originally filed or, to the extent a
signed copy is not available, a conformed copy, certified by an officer
of the Company to be in the form as originally filed, including all
Incorporated Documents and exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable after the
date hereof, as many copies of the Prospectus as of such date as you
may reasonably request.
(c) It will cause the Prospectus to be filed with the
Commission pursuant to Rule 424 as soon as practicable and advise you
of the issuance of any stop order under the Securities Act with respect
to the Registration Statement or the institution of any proceedings
therefor of which the Company shall have received notice. The Company
will use its best efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof if issued.
(d) If, during such period of time (not exceeding nine months)
after the Prospectus has been filed with the Commission pursuant to
Rule 424 as in the opinion of Counsel for the Underwriters a prospectus
covering the Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event relating
to or affecting the Company or of which the Company shall be advised in
writing by you shall occur that in the Company's reasonable opinion
after consultation with Counsel for the Underwriters
should be set forth in a supplement to, or an amendment of, the
Prospectus in order to make the Prospectus not misleading in the light
of the circumstances when it is delivered to a purchaser, the Company
will, at its expense, amend or supplement the Prospectus by either (i)
preparing and furnishing to you at the Company's expense a reasonable
number of copies of a supplement or supplements or an amendment or
amendments to the Prospectus or (ii) making an appropriate filing
pursuant to Section 13 of the Exchange Act, which will supplement or
amend the Prospectus so that, as supplemented or amended, it will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading; provided that should such event relate
solely to the activities of any of the Underwriters, then the
Underwriters shall assume the expense of preparing and furnishing any
such amendment or supplement. In case any Underwriter is required to
deliver a prospectus after the expiration of nine months from the date
the Prospectus is filed with the Commission pursuant to Rule 424, the
Company, upon such Underwriter's request, will furnish to such
Underwriter, at the expense of such Underwriter, a reasonable quantity
of a supplemental prospectus or supplements to the Prospectus complying
with Section 10(a) of the Securities Act.
(e) It will make generally available to its security holders,
as soon as practicable, an earnings statement (which need not be
audited) covering a period of at least twelve months beginning not
earlier than the first day of the month next succeeding the month in
which occurred the effective date of the Registration Statement as
defined in Rule 158 under the Securities Act.
(f) It will furnish such proper information as may be lawfully
required and otherwise cooperate in qualifying the Securities for offer
and sale under the blue-sky laws of such jurisdictions as you may
designate, provided that the Company shall not be required to qualify
as a foreign corporation or dealer in securities, to file any consents
to service of process under the laws of any jurisdiction, or to meet
any other requirements deemed by the Company to be unduly burdensome.
(g) It will, except as herein provided, pay all expenses and
taxes (except transfer taxes) in connection with (i) the preparation
and filing by it of the Registration Statement, (ii) the issuance and
delivery of the Securities as provided in Section 5 hereof, (iii) the
qualification of the Securities under blue-sky laws (including counsel
fees not to exceed $7,500), and (iv) the printing and delivery to the
Underwriters of reasonable quantities of the Registration Statement
and, except as provided in Section 6(d) hereof, of the Prospectus. The
Company shall not, however, be required to pay any amount for any
expenses of yours or any of the Underwriters, except that, if this
Agreement shall be terminated in accordance with the provisions of
Section 7, 8 or 10 hereof, the Company will reimburse you for the fees
and disbursements of Counsel for the Underwriters, whose fees and
disbursements the Underwriters agree to pay in any other event, and
will reimburse the Underwriters for their reasonable out-of-pocket
expenses, in an aggregate amount not exceeding $5,000, incurred in
contemplation of the performance of this Agreement. The Company shall
not in any event be liable to any of the several Underwriters for
damages on account of loss of anticipated profits.
(h) During the period from the date of this Agreement to the
Closing Date, the Company will not, without the prior written consent
of the Representatives, directly or indirectly, publicly issue, sell,
offer or contract to sell, in the market in which the Securities are
being offered and sold, any securities of the Company or any of its
subsidiaries which are of the same class as the Securities.
7. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the Underwriters to purchase and pay for the Securities shall be subject to
the accuracy of the representations and warranties made herein on the part of
the Company, to the performance by the Company of its obligations to be
performed hereunder prior to the Closing Date, and to the following conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424 prior to 5:30 P.M., New York Time, on the second
business day after the date of this Agreement, or such other time and
date as may be approved by you.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for that
purpose shall be pending before, or threatened by, the Commission on
the Closing Date; and you shall have received a certificate, dated the
Closing Date and signed by an officer of the Company, to the effect
that no such stop order is in effect and that no proceedings for such
purpose are pending before, or to the knowledge of the Company
threatened by, the Commission.
(c) On the Closing Date, you shall have received from Worsham,
Forsythe & Wooldridge, L.L.P., General Counsel for the Company, Thelen
Reid & Priest LLP, of counsel for the Company, and Winthrop, Stimson,
Putnam & Roberts, Counsel for the Underwriters, opinions in
substantially the form and substance prescribed in Schedules III, IV
and V hereto (i) with such changes therein as may be agreed upon by the
Company and you, with the approval of Counsel for the Underwriters, and
(ii) if the Prospectus relating to the Securities shall be supplemented
or amended after the Prospectus shall have been filed with the
Commission pursuant to Rule 424, with any changes therein necessary to
reflect such supplementation or amendment.
(d) On and as of the Closing Date, you shall have received
from Deloitte & Touche LLP a letter to the effect that (i) they are
independent certified public accountants with respect to the Company,
within the meaning of the Securities Act and the applicable published
rules and regulations thereunder, (ii) in their opinion, the financial
statements audited by them and included or incorporated by reference in
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the
applicable published rules and regulations thereunder, (iii) on the
basis of a reading of the unaudited amounts of operating revenues and
net income included or incorporated by reference in the Prospectus and
the related financial statements from which these amounts were derived,
the latest available unaudited financial statements of the Company and
the minute books of the Company and inquiries of officers of the
Company and of certain material direct or indirect subsidiaries of the
Company who have responsibility for financial and accounting matters
(it being understood that the foregoing procedures do not constitute an
audit made in accordance with generally accepted auditing standards and
would not necessarily reveal matters of significance with respect to
the comments made in such letter, and accordingly that Deloitte &
Touche LLP makes no representation as to the sufficiency of such
procedures for the several Underwriters' purposes), nothing has come to
their attention which caused them to believe that (A) the unaudited
financial statements of the Company incorporated by reference in the
Prospectus were not determined in accordance with generally accepted
accounting principles applied on a basis substantially consistent with
that of the corresponding amounts in the latest available audited
financial statements of the Company, (B) the unaudited amounts of
operating revenues and net income of the Company included or
incorporated by reference in the Prospectus were not determined on a
basis substantially consistent with that of the corresponding amounts
in the audited statements of income of the Company, incorporated by
reference in the Prospectus, (C) for the twelve months ended ,
if available, there were any decreases in operating revenues or net
income as compared with the comparable period of the preceding year,
and (D) at a specified date not more than seven days prior to the date
of such letter, there was any change in the capital stock of the
Company, short-term bank loans, commercial paper, notes payable to TXU
Corp or long-term debt of the Company or decrease in its net assets, in
each case as compared with amounts shown in the most recent balance
sheets of the Company incorporated by reference in the Prospectus,
except in all instances for changes or decreases that the Prospectus
discloses have occurred or may occur or which are occasioned by the
declaration of a regular quarterly dividend or the acquisition of
long-term debt for sinking fund purposes, or which are
described in such letter, and (iv) they have compared the dollar
amounts (or percentages or ratios derived from such dollar amounts) and
other financial information included or incorporated by reference in
the Registration Statement and the Prospectus as reasonably requested
by you (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the Company and its consolidated
subsidiaries subject to the internal controls of the accounting system
of such companies or are derived indirectly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter, and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
(e) Since the most recent dates as of which information is
given in the Registration Statement or the Prospectus there shall not
have been any material adverse change in the business, property or
financial condition of the Company and its subsidiaries, considered as
a whole, and, since such dates, there shall not have been any material
transaction entered into by the Company and its subsidiaries, in each
case other than transactions in the ordinary course of business and
transactions contemplated by the Registration Statement or Prospectus,
and at the Closing Date you shall have received a certificate to such
effect dated the Closing Date and signed by an officer of the Company.
(f) All legal proceedings to be taken in connection with the
issuance and sale of the Securities as described in the Prospectus
shall have been satisfactory in form and substance to Counsel for the
Underwriters.
(g) Since the date of this agreement, neither Moody's Investor
Services nor Standard and Poor's Corporation shall have downgraded or
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any securities of the
Company which are of the same class as the Securities or the financial
condition of the Company.
In case any of the conditions specified above in this Section
7 shall not have been fulfilled, this Agreement may be terminated by the
Representatives upon notice thereof to the Company. Any such termination shall
be without liability of any party to any other party except as otherwise
provided in Sections 6(g) and 9 hereof.
8. Conditions of Company's Obligations. The obligation of the
-----------------------------------
Company to deliver the Securities shall be subject to the conditions that the
Prospectus shall have been filed with the Commission pursuant to Rule 424 prior
to 5:30 P.M., New York Time, on the second business day after the date of this
Agreement or such other time and date as may be approved by the Company, and no
stop order suspending the effectiveness of the Registration Statement shall be
in effect at the Closing Date and no proceedings for that purpose shall be
pending before, or threatened by, the Commission at the Closing Date. In case
these conditions shall not have been fulfilled, this Agreement may be terminated
by the Company upon notice thereof to you. Any such termination shall be without
liability of any party to any other party except as otherwise provided in
Sections 6(g) and 9 hereof.
9. Indemnification.
---------------
(a) The Company shall indemnify, defend and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act from and against any and
all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or any
other statute or common law and shall reimburse each such Underwriter
and controlling person for any legal or other expenses (including, to
the extent hereinafter provided, reasonable counsel fees) incurred by
them in connection with investigating any such losses, claims, damages
or liabilities or in connection with defending any actions, insofar as
such losses, claims, damages, liabilities, expenses or actions arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein in the
light of the circumstances under which they were made not misleading;
provided, however, that the indemnity agreement contained in this
Section 9 shall not apply to any such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon, any
such untrue statement or alleged untrue statement, or any such omission
or alleged omission, if such statement or omission was made in reliance
upon information furnished in writing to the Company by or on behalf of
any Underwriter, through the Representatives or Counsel for the
Underwriters, for use in connection with the preparation of the
Registration Statement or the Prospectus or any amendment or supplement
to either thereof, or arising out of, or based upon, statements in or
omissions from that part of the Registration Statement that shall
constitute the Statements of Eligibility and Qualification under the
Trust Indenture Act of any Trustee with respect to any indenture
qualified pursuant to the Registration Statement; and provided further,
that the indemnity agreement contained in this Section 9 shall not
inure to the benefit of any Underwriter (or of any person controlling
such Underwriter) on account of any such losses, claims, damages,
liabilities, expenses or actions arising from the sale of the
Securities to any person if a copy of the Prospectus (including any
amendment or supplement thereto if any amendments or supplements
thereto shall have been furnished to the Underwriters at or prior to
the time of written confirmation of the sale involved and such
amendment or supplement corrected the alleged omission or alleged
untrue statement in the Prospectus) (exclusive of the Incorporated
Documents) shall not have been given or sent to such person by or on
behalf of such Underwriter with or prior to the written
confirmation of the sale involved. The indemnity agreement of the
Company contained in this Section 9 and the representations and
warranties of the Company contained in Section 3 hereof shall remain
operative and in full force and effect regardless of any termination of
this Agreement or of any investigation made by or on behalf of any
Underwriter or any such controlling person, and shall survive the
delivery of the Securities.
(b) Each Underwriter shall indemnify, defend and hold harmless
the Company, its officers and directors, and each person who controls
the Company within the meaning of Section 15 of the Securities Act,
from and against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under
the Securities Act or any other statute or common law and shall
reimburse each of them for any legal or other expenses (including, to
the extent hereinafter provided, reasonable counsel fees) incurred by
them in connection with investigating any such losses, claims, damages
or liabilities or in connection with defending any actions, insofar as
such losses, claims, damages, liabilities, expenses or actions
arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of such Underwriter, through the
Representatives or Counsel for the Underwriters, for use in connection
with the preparation of the Registration Statement or the Prospectus or
any amendment or supplement to either thereof. Each Underwriter hereby
furnishes to the Company in writing expressly for use in the Prospectus
[indicate topics addressed and location in the Prospectus.] The
indemnity agreement of the respective Underwriters contained in this
Section 9 shall remain operative and in full force and effect
regardless of any termination of this Agreement or of any investigation
made by or on behalf of the Company, its directors or its officers, any
such Underwriter, or any such controlling person, and shall survive the
delivery of the Securities.
(c) The Company and the several Underwriters each shall, upon
the receipt of notice of the commencement of any action against it or
any person controlling it as aforesaid, in respect of which indemnity
may be sought on account of any indemnity agreement contained herein,
promptly give written notice of the commencement thereof to the party
or parties against whom indemnity shall be sought hereunder, but the
omission so to notify such indemnifying party or parties of any such
action shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party otherwise
than on account of such indemnity agreement. In case such notice of any
such action shall be so given, such indemnifying party shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume (in conjunction with any other indemnifying parties)
the defense of such action, in which event such defense shall be
conducted by counsel chosen by such indemnifying party or parties and
satisfactory to the indemnified party or parties who shall be defendant
or defendants in such action, and such defendant or defendants shall
bear the fees and expenses of any additional counsel retained by them;
but if the indemnifying party shall elect not to assume the defense of
such action, such indemnifying party will reimburse such indemnified
party or parties for the reasonable fees and expenses of any counsel
retained by them; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party
and counsel for the indemnifying party shall have reasonably concluded
that there may be a conflict of interest involved in the representation
by such counsel of both the indemnifying party and the indemnified
party, the indemnified party or parties shall have the right to select
separate counsel, satisfactory to the indemnifying party, to
participate in the defense of such action on behalf of such indemnified
party or parties (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel representing the indemnified parties who are parties to such
action). Each of the Company and the Underwriters agrees that without
the other party's prior written consent, which consent shall not be
unreasonably withheld, it will not settle, compromise or consent to the
entry of any judgment in any claim in respect of which indemnification
may be sought under the indemnification provisions of this Agreement,
unless such settlement, compromise or consent (i) includes an
unconditional release of such other party from all liability arising
out of such claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of
such other party.
(d) If the indemnification provided for in sub-paragraph (a)
or (b) above shall be unenforceable under applicable law by an
indemnified party, each indemnifying party agrees to contribute to such
indemnified party with respect to any and all losses, claims, damages,
liabilities and expenses for which each such indemnification provided
for in subparagraph (a) or (b) above shall be unenforceable, in such
proportion as shall be appropriate to reflect (i) the relative fault of
each indemnifying party on the one hand and the indemnified party on
the other in connection with the statements or omissions which have
resulted in such losses, claims, damages, liabilities and expenses,
(ii) the relative benefits received by the Company on the one hand and
the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement, and (iii) any other relevant equitable
considerations; provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any
indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified
party and each such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The Company and each of the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
subparagraph (d) were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to
contribute in excess of the amount equal to the excess of (i) the total
price at which the Securities underwritten by it were offered to the
public, over (ii) the amount of any damages which such Underwriter has
otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission. The obligations of
each Underwriter to contribute pursuant to this Section 9 are several
and not joint and shall be in proportion to the principal amount of
Securities set forth opposite its name in Schedule II hereto.
10. Termination. This Agreement may be terminated, at any time
-----------
prior to the Closing Date, by the Representatives by written notice to the
Company if (a) after the date hereof and at or prior to the Closing Date there
shall have occurred any suspension or material limitation of trading of any of
the Company's securities on the New York Stock Exchange, Inc. ("NYSE") or any
general suspension of trading in securities on the NYSE, the American Stock
Exchange, Inc. ("AMEX") or the NASDAQ Stock Market, Inc. ("NASDAQ") or there
shall have been established by the NYSE, AMEX or NASDAQ or by the Commission or
by any federal or state agency or by the decision of any court, any general
limitation on prices for such trading or any general restrictions on the
distribution of securities, or a general banking moratorium declared by New York
or federal authorities, or (b) there shall have occurred any (i) new material
outbreak of hostilities or (ii) new material other national or international
calamity or crisis, including, but not limited to, an escalation of hostilities
that existed prior to the date of this Agreement or (iii) material adverse
change in the financial markets in the United States, and the effect of any such
event specified in clause (a) or (b) above on the financial markets of the
United States shall be such as to make it impracticable, in the reasonable
judgment of the Representatives, for the Underwriters to enforce contracts for
the sale of the Securities. This Agreement may also be terminated at any time
prior to the Closing Date by the Representatives if, in their reasonable
judgment, the subject matter of any amendment or supplement to the Registration
Statement or the Prospectus (other than an amendment or supplement relating
solely to the activity of any Underwriter or Underwriters) prepared and issued
by the Company after the effectiveness of this Agreement shall have disclosed a
material adverse change in the business, property or financial condition of the
Company that has materially impaired the marketability of the Securities. Any
termination hereof pursuant to this Section 10 shall be without liability of any
party to any other party except as otherwise provided in Sections 6(g) and 9
hereof.
11. Miscellaneous. THE VALIDITY AND INTERPRETATION OF THIS
-------------
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. This Agreement
shall inure to the benefit of the Company, the several Underwriters and, with
respect to the provisions of Section 9 hereof, each director, officer and
controlling person referred to in said Section 9, and their respective
successors. Nothing herein is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right, remedy or claim
under or in respect of any provision in this Agreement. The term "successor" as
used herein shall not include any purchaser, as such purchaser, of any of the
Securities from any of the several Underwriters.
12. Notices. All communications hereunder shall be in
-------
writing, and, if to the Underwriters, shall be mailed or delivered to you at the
address set forth above, or, if to the Company, shall be mailed or delivered to
it at 1601 Bryan Street, Dallas, Texas 75201, Attention: Treasurer.
If the foregoing is in accordance with your understanding of
our agreement, please indicate your acceptance thereof in the space provided
below for that purpose, whereupon this letter and your acceptance shall
constitute a binding agreement between the Company and the several Underwriters
in accordance with its terms.
Very truly yours,
TXU GAS COMPANY
By
---------------------------------
Accepted and delivered as of
the date first above written
[Representatives of Underwriters]
By:
By:
-----------------------------------
SCHEDULE I
----------
Underwriting Agreement dated:
Representatives:
Designation:
Principal Amount:
Interest Rate:
Purchase Price:
Underwriting Commissions (payable by the Company):
Public Offering Price:
SCHEDULE II
-----------
TXU GAS COMPANY
Principal Amount of
Name Securities
- ---- -------------------
Total ===================
$
SCHEDULE III
------------
[LETTERHEAD OF WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.]
[Date]
as Representatives of the Underwriters named in Schedule II
to the Underwriting Agreement, as herein defined
c/o
Ladies and Gentlemen:
We have acted as General Counsel to TXU Gas Company, a Texas
corporation, (the "Company"), in connection with the issuance and sale by the
Company of of its ("Securities") pursuant to the Underwriting
---- -------------
Agreement dated among the Company and you (the "Underwriting
--------------
Agreement").
Terms not otherwise defined herein are used with the meanings
ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, the Indenture, and the Securities. We have also examined
such other documents and satisfied ourselves as to such other matters as we have
deemed necessary as a basis for the conclusions of law contained in the opinions
expressed below. We have relied as to various questions of fact upon the
representations and warranties of the Company contained in the Underwriting
Agreement and, where we deemed appropriate, on certificates of public officials.
We have relied upon a certificate of the Indenture Trustee as to the
authentication of the Securities. In our examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity to original documents of all documents
submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these transactions and
with the affairs and properties of the Company generally, we are of the opinion
that:
1. The Company is a corporation duly authorized, validly existing
and in good standing under the laws of the State of Texas, and has the corporate
power and authority: (a) to execute, deliver and perform its obligations under
the Underwriting Agreement and the Indenture, (b) to issue the Securities and to
incur the indebtedness to be evidenced thereby and (c) to own its property and
assets and to conduct the business which it is now conducting.
2. The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
3. The Indenture has been duly qualified under the Trust
Indenture Act.
4. The Securities and the Indenture have been duly authorized,
executed and delivered by the Company, the Securities are entitled to the
benefits of the Indenture, and the Securities and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
5. The statements made in the Prospectus under the captions
[Insert titles of sections describing the Securities in the Prospectus and
Prospectus Supplement], insofar as they purport to constitute summaries of the
terms of the documents referred to therein, constitute accurate summaries of the
terms of such documents in all material respects.
6. The Company is not an investment company within the meaning of
the Investment Company Act of 1940, as amended.
7. Other than as stated in the Registration Statement and the
Prospectus, there are no material pending legal proceedings to which the Company
is a party or of which property of the Company is the subject which depart from
the ordinary routine litigation incident to the kind of business conducted by
the Company, and to our knowledge no such proceedings are contemplated.
8. The Registration Statement, and the Prospectus at the time it
was filed with the Commission pursuant to Rule 424 under the Securities Act
(except for financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein
and except for that part of the Registration Statement that constitutes
the Forms T-1, as to which we do not express any belief) complied as to form in
all material respects with the Securities Act and the applicable instructions,
rules and regulations of the Commission thereunder; the Incorporated Documents
(except as to the financial statements and schedules and other financial and
statistical data contained therein, as to which we do not express any opinion),
at the time they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the applicable
instructions, rules and regulations of the Commission thereunder; and the
Registration Statement has become and is effective under the Securities Act and,
to our best knowledge, no proceedings for a stop order with respect thereto are
pending or threatened under Section 8 of the Securities Act.
9. No other approval, authorization, consent or order of any
public board or body (other than in connection or in compliance with the
provisions of the blue-sky laws of any jurisdiction) is legally required for the
authorization of the issue and sale by the Company of the Securities.
In the course of the preparation of the information relating to
the Company contained in the Prospectus (including the documents incorporated
therein by reference) we had discussions with certain of its officers and
representatives and certain officers and representatives of certain of its
subsidiaries, with other counsel for the Company, with Deloitte & Touche LLP,
the Company's independent certified public accountants who audited certain of
the financial statements contained in documents incorporated by reference in the
Registration Statement and the Prospectus, and with certain of your officers and
employees and your counsel, but we made no independent verification of the
accuracy or completeness of the representations and statements made to us by the
Company or the information included by the Company in the Prospectus and take no
responsibility therefor except as set forth in paragraph 5 above. However, our
examination of the information relating to the Company contained in the
Registration Statement and the Prospectus and our discussions did not disclose
to us anything which gives us reason to believe that (except as to financial
statements and schedules and other financial and statistical data and except as
to that part of the Registration Statement that constitutes the Forms T-1, as to
which we do not express any belief) (i) the Registration Statement, as of the
Effective Date, included an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Prospectus at the time it was
filed with the Commission pursuant to Rule 424, included, or on the date hereof
includes an untrue statement of a material fact or on such dates omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
We are members of the State Bar of Texas and do not hold
ourselves out as experts in the laws of the State of New York. As to all matters
of New York law, we have, with your consent, relied upon the opinion of even
date herewith of Thelen Reid & Priest LLP, New York, New York, of Counsel to the
Company.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By:
---------------------
A Partner
Schedule IV
[LETTERHEAD OF THELEN REID & PRIEST LLP]
New York, New York
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement, as herein defined
Ladies and Gentlemen:
We have acted as counsel to TXU Gas Company, a Texas
corporation (the "Company"), in connection with the issuance and sale by the
Company of of its ("Securities") pursuant to the Underwriting
---- -------------
Agreement dated among the Company and you (the "Underwriting
--------------
Agreement").
Terms not otherwise defined herein are used with the meanings
ascribed to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, the Indenture, and the Securities. We have also examined
such other documents and satisfied ourselves as to such other matters as we have
deemed necessary as a basis for the conclusions of law contained in the opinions
expressed below. We have relied as to various questions of fact upon the
representations and warranties of the Company contained in the Underwriting
Agreement and, where we deemed appropriate, on certificates of public officials.
We have relied upon a certificate of the Indenture Trustee as to the
authentication of the Securities. In our examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity to original documents of all documents
submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these transactions and
with the affairs and properties of the Company generally, we are of the opinion
that:
1. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
2. The Indenture has been duly qualified under the Trust
Indenture Act.
3. The Securities and the Indenture have been duly authorized,
executed and delivered by the Company, the Securities are entitled to the
benefits of the Indenture, and the Securities and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
4. The statements made in the Prospectus under the captions
[Insert titles of sections describing the Securities in the Prospectus and
Prospectus Supplement], insofar as they purport to constitute summaries of the
terms of the documents referred to therein, constitute accurate summaries of the
terms of such documents in all material respects.
5. The Company is not an investment company within the meaning
of the Investment Company Act of 1940, as amended.
6. The Registration Statement, and the Prospectus at the time
it was filed with the Commission pursuant to Rule 424 under the Securities Act
(except for financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein and except for
that part of the Registration Statement that constitutes the Forms T-1, as to
which we do not express any belief) complied as to form in all material respects
with the Securities Act and the applicable instructions, rules and regulations
of the Commission thereunder; the Incorporated Documents (except as to the
financial statements and schedules and other financial and statistical data
contained therein, as to which we do not express any opinion), at the time they
were filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the applicable instructions, rules
and regulations of the Commission thereunder; and the Registration Statement has
become and is effective under the Securities Act and, to our best knowledge, no
proceedings for a stop order with respect thereto are pending or threatened
under Section 8 of the Securities Act.
7. No other approval, authorization, consent or order of any
public board or body (other than in connection or in compliance with the
provisions of the blue-sky laws of any jurisdiction) is legally required for the
authorization of the issue and sale by the Company of the Securities.
In the course of the preparation of the information relating
to the Company contained in the Prospectus (including the documents incorporated
therein by reference) we had discussions with certain of its officers and
representatives and certain officers and representatives of certain of its
subsidiaries, with other counsel for the Company, with Deloitte & Touche LLP,
the Company's independent certified public accountants who audited certain of
the financial statements contained in documents incorporated by reference in the
Registration Statement and the Prospectus, and with certain of your officers and
employees and your counsel, but we made no independent verification of the
accuracy or completeness of the representations and statements made to us by the
Company or the information included by the Company in the Prospectus and take no
responsibility therefor except as set forth in paragraph 4 above. However, our
examination of the information relating to the Company contained in the
Registration Statement and the Prospectus and our discussions did not disclose
to us anything which gives us reason to believe that (except as to financial
statements and schedules and other financial and statistical data and except as
to that part of the Registration Statement that constitutes the Forms T-1, as to
which we do not express any belief) (i) the Registration Statement, as of the
Effective Date, included an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Prospectus at the time it was
filed with the Commission pursuant to Rule 424, included, or on the date hereof
includes an untrue statement of a material fact or on such dates omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
We are members of the New York Bar and do not hold ourselves
out as experts in the laws of the State of Texas. As to all matters of Texas
law, we have, with your consent, relied upon the opinion of even date herewith
of Worsham, Forsythe & Wooldridge, L.L.P., Dallas, Texas, General Counsel for
the Company. We believe that you and we are justified in relying on such
opinion.
Very truly yours,
THELEN REID & PRIEST LLP
SCHEDULE V
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement as defined herein
c/o
Ladies and Gentlemen:
We have acted as counsel to you and the several Underwriters
in connection with the issuance and sale by the TXU Gas Company, a Texas
corporation (the "Company"), of of its ("Securities")
---- -------------
pursuant to the Underwriting Agreement dated among the Company
--------------
and you (the "Underwriting Agreement").
Terms not otherwise defined herein are used with the meanings
ascribed to them in the Underwriting Agreement.
We are members of the New York Bar and do not hold ourselves
out as experts on the laws of the State of Texas. We have, with your consent,
relied upon an opinion of even date herewith addressed to you by Worsham,
Forsythe & Wooldridge, L.L.P., Dallas, Texas, General Counsel for the Company,
as to the matters covered in such opinion relating to Texas law. We have
reviewed such opinion and believe that it is satisfactory and that you and we
are justified in relying thereon.
We have, in addition, examined the documents described in the
list of closing papers as having been delivered to you at the closing and such
other documents and satisfied ourselves as to such other matters as we have
deemed necessary in order to enable us to express this opinion. As to various
questions of fact material to this opinion, we have relied upon representations
of the Company and statements in the Registration Statement hereinafter
mentioned. In such examination we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us and the
genuineness and conformity to original documents of documents submitted to us
as certified or photostatic copies.
Based upon the foregoing, we are of the opinion that:
1. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
2. The Securities and the Indenture have been duly authorized,
executed and delivered by the Company, the Securities are entitled to the
benefits of the Indenture, and the Securities and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
3. The statements made in the Prospectus under the captions
[Insert titles of sections describing the Securities in the Prospectus and
Prospectus Supplement], insofar as they purport to constitute summaries of the
terms of the documents referred to therein, constitute accurate summaries of the
terms of such documents in all material respects.
4. No other approval, authorization, consent or order of any
public board or body (other than in connection or in compliance with the
blue-sky laws of any jurisdiction) is legally required for the authorization of
the issue and sale by the Company of the Securities.
5. The Registration Statement, and the Prospectus at the time
it was filed with the Commission pursuant to Rule 424 under the Securities Act
(except for financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein and except for
that part of the Registration Statement that constitutes the Forms T-1, as to
which we do not express any belief) complied as to form in all material respects
with the Securities Act and the applicable instructions, rules and regulations
of the Commission thereunder.
In passing upon the form of the Registration Statement and the
form of the Prospectus, we necessarily assume the correctness and completeness
of the statements made by the Company and the information included in the
Registration Statement and the Prospectus and take no responsibility therefor,
except insofar as such statements relate to us and as set forth in paragraph 3
above. In the course of the preparation by the Company of the Registration
Statement and the Prospectus, we have had discussions with certain of the
Company's officers and representatives, and representatives of certain of its
subsidiaries, with counsel for the Company, with Deloitte & Touche LLP, the
Company's independent public accountants who audited certain of the financial
statements incorporated by reference in the Registration Statement and the
Prospectus, and with certain of your representatives. Our examination of the
Registration Statement and the Prospectus and our discussions did not disclose
to us any information which gives us reason to believe that at the Effective
Date the Registration Statement contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus, at the
time it was filed with the Commission pursuant to Rule 424, or at the date
hereof, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. We do not express any opinion or belief as to the financial
statements and schedules or other financial or statistical data contained or
incorporated by reference in the Registration Statement or Prospectus or as to
that part of the Registration Statement that constitutes the Forms T-1.
This opinion is given to you solely for the use of the several
Underwriters in connection with the Underwriting Agreement and the transactions
contemplated thereunder and may not be relied upon by any other person or for
any other purpose.
Very truly yours,
EXHIBIT 1(b)
[Name of Trust]
Preferred Trust Securities
UNDERWRITING AGREEMENT
[Date]
as Representatives of the Underwriters
named in Schedule II hereto (the "Representatives")
c/o
Ladies and Gentlemen:
1. Introduction. TXU Gas Company, a Texas corporation (the
------------
"Company") and its financing subsidiary, [Name of Trust], a Delaware business
trust (the "Trust," and hereinafter, together with the Company, the "Offerors"),
propose for the Trust to issue and sell severally to the underwriters named in
Schedule II hereto (the "Underwriters") the Trust's Preferred Trust Securities
of the series designation, with the terms and in the liquidation preference
amount specified in Schedule I hereto (the "Preferred Trust Securities").
2. Description of Preferred Trust Securities. The Offerors propose
-----------------------------------------
for the Trust to issue the Preferred Trust Securities pursuant to an Amended and
Restated Trust Agreement, to be dated as of , among The Bank of New York, as
Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, certain
employees of the Company, as Administrative Trustees, and the several Holders as
defined therein in substantially the form heretofore delivered to you as the
<PAGE>
Representatives, said Agreement being hereinafter referred to as the "Trust
Agreement". In connection with the issuance of the Preferred Trust Securities,
the Company proposes (i) to issue its Junior Subordinated Debentures,
Series (the "Debentures") pursuant to an Indenture, dated as of December 1,
----
1998, between the Company and The Bank of New York, as trustee (the "Indenture")
and (ii) to issue a guarantee of the Preferred Trust Securities to the extent
described in the Prospectus (as defined below) (the "Guarantee").
3. Representations and Warranties of the Offerors. The Offerors
----------------------------------------------
represent and warrant to the several Underwriters that:
(a) The Company and three of its financing subsidiaries (the "Trusts")
have filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 on , 1999 (Registration
--------------
Nos. 333- , 333- -01, 333- -02 and 333- -03) for
------- ------- ------- -------
the registration under the Securities Act of 1933, as amended (the
"Securities Act") of $500,000,000 aggregate amount of (i) the Company's
unsecured debt securities ("Debt Securities") and (ii) the preferred trust
securities of the Trusts, and a principal amount of the Company's junior
subordinated debentures and guarantees and other obligations of the Company
in respect of such preferred trust securities. Such registration statement
("Registration Statement No. 333- ") became effective on ,
------- -----------
1999. The Company has also filed with the Commission under the Securities
Act, a registration statement on Form S-3 on January 7, 1998 (Registration
Nos. 333-43811 and 333-43811- 01) for the registration of $275,000,000
aggregate amount (i) the company's Debt Securities and (ii) certain trust
securities of ENSERCH Capital I, which has been renamed TXU Gas Capital I,
and related securities of the Company, of which all but $100,000,000
aggregate principal amount of the Company's Debt Securities have been
previously issued. Such registration statement was declared effective by
the Commission on January 13, 1998. Such registration statement
("Registration Statement No. 333-43811") was amended by Post-Effective
Amendment No. 1, which was filed on January 21, 1998 and became effective
on January 23, 1998. References herein to the term "Registration Statement"
as of any date shall be deemed to refer to each of Registration Statement
Nos. 333- and Registration Statement No. 333- 43811, each as amended
-------
or supplemented to such date, including all documents incorporated by
reference therein as of such date pursuant to Item 12 of Form S-3
("Incorporated Documents"). References herein to the term "Prospectus" as
of any given date shall be deemed to refer to the combined prospectus
relating to the securities registered under Registration Statement
333- and the securities registered and remaining unissued under
------
-2-
<PAGE>
Registration Statement 333-43811 that forms a part of Registration
Statement No. 333- , as amended or supplemented as of such date
--------
(other than by amendments or supplements relating to securities other than
the Securities), including all Incorporated Documents as of such date and
including any prospectus supplement relating to the Securities; provided
that if the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the General Rules and Regulations of the
Securities Act (the "Rule 462(b) Registration Statement"), then after such
filing, all references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement. References herein to the
term "Effective Date" shall be deemed to refer to the time and date
Registration Statement No. 333- or the Rule 462(b) Registration
-------
Statement, as the case may be, was declared effective. The Company will not
file any amendment to the Registration Statement or supplement to the
Prospectus on or after the date of this Agreement and prior to the Closing
Date, as hereinafter defined, without prior notice to the Underwriters, or
to which Counsel for the Underwriters shall reasonably object in writing.
For the purposes of this Agreement, any Incorporated Document filed with
the Commission on or after the date of this Agreement and prior to the
Closing Date, as hereinafter defined, shall be deemed an amendment or
supplement to the Registration Statement and the Prospectus.
(b) On the Effective Date, the Registration Statement and the
Prospectus complied in all material respects and at the Closing Date, as
hereinafter defined, the Registration Statement, the Prospectus, the Trust
Agreement, the Indenture and the Guarantee will comply in all material
respects with the applicable provisions of the Securities Act, the Trust
Indenture Act of 1939, as amended ("Trust Indenture Act"), and the
applicable rules and regulations of the Commission thereunder; on the
Effective Date the Registration Statement did not, and at the Closing Date,
as hereinafter defined, the Registration Statement will not, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; on the Effective Date the Prospectus did not, and at the
Closing Date, as hereinafter defined, and on the date it is filed with the
Commission pursuant to Rule 424 of the General Rules and Regulations of the
Securities Act ("Rule 424"), the Prospectus will not, contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and on said dates the
Incorporated Documents, taken together as a whole, complied or will comply
-3-
<PAGE>
in all material respects with the applicable provisions of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the applicable
rules and regulations of the Commission thereunder, and, when read together
with the Prospectus on said dates did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided
that the foregoing representations and warranties in this paragraph (b)
shall not apply to statements or omissions made in reliance upon
information furnished in writing to the Company by, or on behalf of, any
Underwriter for use in connection with the preparation of the Registration
Statement or the Prospectus or to any statements in or omissions from the
Statements of Eligibility and Qualification under the Trust Indenture Act,
or amendments thereto, filed as exhibits to the Registration Statement.
(c) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or the Trust is now a party.
4. Purchase and Sale.
-----------------
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the
Trust shall sell to each of the Underwriters, and each Underwriter shall
purchase from the Trust, at the time and place herein specified, severally
and not jointly, the liquidation preference amount of the Preferred Trust
Securities set forth opposite the name of such Underwriter in Schedule II
attached hereto, at the purchase price or prices set forth in Schedule I
hereto.
(b) The Company shall pay to the Underwriters a commission
equal to % of the aggregate liquidation preference amount of the
-----
Preferred Trust Securities.
5. Time and Place of Closing. Delivery of the Preferred Trust
-------------------------
Securities against payment of the aggregate purchase price therefor by wire
transfer in federal funds shall be made at the offices of Thelen Reid & Priest
LLP, 40 West 57th Street, New York, New York, at 10:00 A.M., New York Time, on
, or at such other place, time and date as shall be agreed
- -------------------
upon in writing by the Company and you or established in accordance with the
following paragraph. The hour and date of such delivery and payment are herein
-4-
<PAGE>
called the "Closing Date". The Preferred Trust Securities shall be delivered to
The Depository Trust Company or to The Bank of New York, as custodian for The
Depository Trust Company, in fully registered global form registered in the name
of Cede & Co., for the respective accounts specified by you not later than the
close of business on the business day preceding the Closing Date. The Trust
agrees to make the Preferred Trust Securities available to you for checking
purposes not later than 10:00 A.M., New York Time, on the last business day
preceding the Closing Date at the offices of Thelen Reid & Priest, 40 West
57th Street, New York, New York, 10019, or at such other place as the Trust may
specify.
If any Underwriter shall fail or refuse (otherwise than for some
reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the liquidation preference amount of the Preferred Trust Securities that
such Underwriter has agreed to purchase and pay for hereunder, the Company shall
immediately give notice to the other Underwriters of the default of such
Underwriter, and the other Underwriters shall have the right within 24 hours
after the receipt of such notice to determine to purchase, or to procure one or
more others, who are members of the National Association of Securities Dealers,
Inc. ("NASD") (or, if not members of the NASD, who are not eligible for
membership in the NASD and who agree (i) to make no sales within the United
States, its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply with the NASD's
Conduct Rules) and satisfactory to the Company, to purchase, upon the terms
herein set forth, the liquidation preference amount of the Preferred Trust
Securities that the defaulting Underwriter had agreed to purchase. If any
non-defaulting Underwriter or Underwriters shall determine to exercise such
right, such Underwriter or Underwriters shall give written notice to the Company
of the determination in that regard within 24 hours after receipt of notice of
any such default, and thereupon the Closing Date shall be postponed for such
period, not exceeding three business days, as the Company shall determine. If in
the event of such a default no non-defaulting Underwriter shall give such
notice, then this Agreement may be terminated by the Company, upon like notice
given to the non-defaulting Underwriters, within a further period of 24 hours.
If in such case the Company shall not elect to terminate this Agreement it shall
have the right, irrespective of such default:
(a) to require each non-defaulting Underwriter to purchase and
pay for the respective liquidation preference amount of the Preferred Trust
Securities that it had agreed to purchase hereunder as hereinabove provided
and, in addition, the liquidation preference amount of the Preferred Trust
Securities that the defaulting Underwriter shall have so failed to purchase
-5-
<PAGE>
up to a liquidation preference amount thereof equal to one-ninth (1/9) of
the liquidation preference amount of Preferred Trust Securities that such
non-defaulting Underwriter has otherwise agreed to purchase hereunder,
and/or
(b) to procure one or more persons, reasonably acceptable to
the Representatives, who are members of the NASD (or, if not members of the
NASD, who are not eligible for membership in the NASD and who agree (i) to
make no sales within the United States, its territories or its possessions
or to persons who are citizens thereof or residents therein and (ii) in
making sales to comply with the NASD's Conduct Rules), to purchase, upon
the terms herein set forth, either all or a part of the liquidation
preference amount of the Preferred Trust Securities that such defaulting
Underwriter had agreed to purchase or that portion thereof that the
remaining Underwriters shall not be obligated to purchase pursuant to the
foregoing clause (a).
In the event the Company shall exercise its rights under (a) and/or (b) above,
the Company shall give written notice thereof to the non-defaulting Underwriters
within such further period of 24 hours, and thereupon the Closing Date shall be
postponed for such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred to in this
Section 5, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday that would otherwise be included in such
period of time.
Any action taken by the Company under this Section 5 shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement. Termination by the Company under this Section
5 shall be without any liability on the part of the Company or any
non-defaulting Underwriter, except as otherwise provided in Sections 6(g) and 9
hereof.
6. Covenants of the Company. The Company agrees that:
------------------------
(a) It will promptly deliver to each of you a signed copy of the
Registration Statement as originally filed or, to the extent a signed copy
is not available, a conformed copy, certified by an officer of the Company
to be in the form as originally filed, including all Incorporated Documents
and exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable after the
date hereof, as many copies of the Prospectus as of such date as you may
reasonably request.
-6-
<PAGE>
(c) It will cause the Prospectus to be filed with the Commission
pursuant to Rule 424 as soon as practicable and advise you of the issuance
of any stop order under the Securities Act with respect to the Registration
Statement or the institution of any proceedings therefor of which the
Offerors shall have received notice. The Company will use its best efforts
to prevent the issuance of any such stop order and to secure the prompt
removal thereof if issued.
(d) If, during such period of time (not exceeding nine months) after
the Prospectus has been filed with the Commission pursuant to Rule 424 as
in the opinion of Counsel for the Underwriters a prospectus covering the
Preferred Trust Securities is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event relating to or affecting
the Company or the Trust or of which the Company shall be advised in
writing by you shall occur that in the Company's reasonable opinion after
consultation with Counsel for the Underwriters should be set forth in a
supplement to, or an amendment of, the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances when it is
delivered to a purchaser, the Company will, at its expense, amend or
supplement the Prospectus by either (i) preparing and furnishing to you at
the Company's expense a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus or (ii) making
an appropriate filing pursuant to Section 13 of the Exchange Act, which
will supplement or amend the Prospectus so that, as supplemented or
amended, it will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading; provided that should such event relate
solely to the activities of any of the Underwriters, then the Underwriters
shall assume the expense of preparing and furnishing any such amendment or
supplement. In case any Underwriter is required to deliver a prospectus
after the expiration of nine months from the date the Prospectus is filed
with the Commission pursuant to Rule 424, the Company, upon such
Underwriter's request, will furnish to such Underwriter, at the expense of
such Underwriter, a reasonable quantity of a supplemental prospectus or
supplements to the Prospectus complying with Section 10(a) of the
Securities Act.
(e) It will make generally available to its security holders and the
security holders of the Trust, as soon as practicable, an earnings
statement (which need not be audited) covering a period of at least twelve
months beginning not earlier than the first day of the month next
-7-
<PAGE>
succeeding the month in which occurred the effective date of the
the Registration Statement as defined in Rule 158 under the Securities Act.
(f) It will furnish such proper information as may be lawfully
required and otherwise cooperate in qualifying the Preferred Trust
Securities for offer and sale under the blue-sky laws of such jurisdictions
as you may designate, provided that the neither of the Offerors shall be
required to qualify as a foreign corporation or dealer in securities, to
file any consents to service of process under the laws of any jurisdiction,
or to meet any other requirements deemed by the Offerors to be unduly
burdensome.
(g) It will, except as herein provided, pay all expenses and taxes
(except transfer taxes) in connection with (i) the preparation and filing
by it of the Registration Statement, (ii) the issuance and delivery of the
Preferred Trust Securities as provided in Section 5 hereof, (iii) the
qualification of the Preferred Trust Securities under blue-sky laws
(including counsel fees not to exceed $7,500), and (iv) the printing and
delivery to the Underwriters of reasonable quantities of the Registration
Statement and, except as provided in Section 6(d) hereof, of the
Prospectus. The Company shall not, however, be required to pay any amount
for any expenses of yours or any of the Underwriters, except that, if this
Agreement shall be terminated in accordance with the provisions of
Section 7, 8 or 10 hereof, the Company will reimburse you for the fees and
disbursements of Counsel for the Underwriters, whose fees and disbursements
the Underwriters agree to pay in any other event, and will reimburse the
Underwriters for their reasonable out-of-pocket expenses, in an aggregate
amount not exceeding $5,000, incurred in contemplation of the performance
of this Agreement. The Company shall not in any event be liable to any of
the several Underwriters for damages on account of loss of anticipated
profits.
(h) During the period from the date of this Agreement to the
Closing Date, neither the Company nor the Trust will, without the prior
written consent of the Representatives, directly or indirectly, publicly
issue, sell, offer or contract to sell, in the market in which the
Preferred Trust Securities are being offered and sold, any securities of
the Company or any of its subsidiaries or of the Trust which are of the
same class as the Preferred Trust Securities.
7. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
Underwriters to purchase and pay for the Preferred Trust Securities shall be
subject to the accuracy of the representations and warranties made herein on the
part of each of the Offerors, to the performance by each of the Offerors
-8-
<PAGE>
of its obligations to be performed hereunder prior to the Closing Date, and to
the following conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424 prior to 5:30 P.M., New York Time, on the second
business day after the date of this Agreement, or such other time and date
as may be approved by you.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the Closing Date; and
you shall have received a certificate, dated the Closing Date and signed by
an officer of the Company, to the effect that no such stop order is in
effect and that no proceedings for such purpose are pending before, or to
the knowledge of the Company threatened by, the Commission.
(c) On the Closing Date, you shall have received from Richards,
Layton & Finger, P.A., Delaware counsel for the Company and the Trust,
Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for the Company,
Thelen Reid & Priest LLP, of counsel for the Company, and Winthrop,
Stimson, Putnam & Roberts, Counsel for the Underwriters, opinions in
substantially the form and substance prescribed in Schedules III, IV, V and
VI hereto (i) with such changes therein as may be agreed upon by the
Company and you, with the approval of Counsel for the Underwriters, and
(ii) if the Prospectus relating to the Preferred Trust Securities shall be
supplemented or amended after the Prospectus shall have been filed with the
Commission pursuant to Rule 424, with any changes therein necessary to
reflect such supplementation or amendment.
(d) On and as of the Closing Date, you shall have received from
Deloitte & Touche LLP a letter to the effect that (i) they are independent
certified public accountants with respect to the Company, within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder, (ii) in their opinion, the financial statements
audited by them and included or incorporated by reference in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the applicable published rules and
regulations thereunder, (iii) on the basis of a reading of the unaudited
amounts of operating revenues and net income included or incorporated by
reference in the Prospectus and the related financial statements from which
these amounts were derived, the latest available unaudited financial
statements of the Company and the minute books of the Company and inquiries
-9-
<PAGE>
of officers of the Company and of certain direct and indirect subsidiaries
of the Company who have responsibility for financial and accounting matters
(it being understood that the foregoing procedures do not constitute an
audit made in accordance with generally accepted auditing standards and
would not necessarily reveal matters of significance with respect to the
comments made in such letter, and accordingly that Deloitte & Touche LLP
makes no representation as to the sufficiency of such procedures for the
several Underwriters' purposes), nothing has come to their attention which
caused them to believe that (A) the unaudited financial statements of the
Company incorporated by reference in the Prospectus were not determined in
accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the corresponding amounts in the
latest available audited financial statements of the Company, (B) the
unaudited amounts of operating revenues and net income of the Company
included or incorporated by reference in the Prospectus were not determined
on a basis substantially consistent with that of the corresponding amounts
in the audited statements of income of the Company, incorporated by
reference in the Prospectus, (C) for the twelve months ended
, if available, there were any decreases in operating
-------------------
revenues or net income as compared with the comparable period of the
preceding year, and (D) at a specified date not more than seven days prior
to the date of such letter, there was any change in the capital stock of
the Company, short-term bank loans, commercial paper, notes payable to TXU
Corp or long-term debt of the Company or decrease in its net assets, in
each case as compared with amounts shown in the most recent balance sheets
of the Company incorporated by reference in the Prospectus, except in all
instances for changes or decreases that the Prospectus discloses have
occurred or may occur or which are occasioned by the declaration of a
regular quarterly dividend or the acquisition of long-term debt for sinking
fund purposes, or which are described in such letter, and (iv) they have
compared the dollar amounts (or percentages or ratios derived from such
dollar amounts) and other financial information included or incorporated by
reference in the Registration Statement and the Prospectus as reasonably
requested by you (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company and its consolidated subsidiaries subject
to the internal controls of the accounting system of such companies or are
derived indirectly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter, and have found such
-10-
<PAGE>
dollar amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such letter.
(e) Since the most recent dates as of which information is
given in the Registration Statement or the Prospectus there shall not have
been any material adverse change in the business, property or financial
condition of the Company and its subsidiaries, considered as a whole, and,
since such dates, there shall not have been any material transaction
entered into by the Company and its subsidiaries, in each case other than
transactions in the ordinary course of business and transactions
contemplated by the Registration Statement or Prospectus, and at the
Closing Date you shall have received a certificate to such effect dated the
Closing Date and signed by an officer of the Company.
(f) All legal proceedings to be taken in connection with the issuance
and sale of the Preferred Trust Securities, the Debentures, the Guarantee,
and the common trust securities to be issued by the Trust as described in
the Prospectus shall have been satisfactory in form and substance to
Counsel for the Underwriters.
(g) Since the date of this agreement, neither Moody's Investor
Services nor Standard and Poor's Corporation shall have downgraded or
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any securities of the Company which
are of the same class as the Preferred Trust Securities or the financial
condition of the Company.
In case any of the conditions specified above in this Section 7 shall
not have been fulfilled, this Agreement may be terminated by the Representatives
upon notice thereof to the Company. Any such termination shall be without
liability of any party to any other party except as otherwise provided in
Sections 6(g) and 9 hereof.
8. Conditions of Offerors' Obligations. The obligation of the
-----------------------------------
Offerors to deliver the Preferred Trust Securities shall be subject to the
conditions that the Prospectus shall have been filed with the Commission
pursuant to Rule 424 prior to 5:30 P.M., New York Time, on the second business
day after the date of this Agreement or such other time and date as may be
approved by the Company, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect at the Closing Date and no proceedings
for that purpose shall be pending before, or threatened by, the Commission at
the Closing Date. In case these conditions shall not have been fulfilled, this
Agreement may be terminated by the Company upon notice thereof to you. Any such
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<PAGE>
termination shall be without liability of any party to any other party except as
otherwise provided in Sections 6(g) and 9 hereof.
9. Indemnification.
---------------
(a) The Offerors shall jointly and severally indemnify, defend and
hold harmless each Underwriter and each person who controls any Underwriter
within the meaning of Section 15 of the Securities Act from and against any
and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or any
other statute or common law and shall reimburse each such Underwriter and
controlling person for any legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading; provided, however, that the indemnity
agreement contained in this Section 9 shall not apply to any such losses,
claims, damages, liabilities, expenses or actions arising out of, or based
upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in
reliance upon information furnished in writing to the Offerors by or on
behalf of any Underwriter, for use in connection with the preparation of
the Registration Statement or the Prospectus or any amendment or supplement
to either thereof, or arising out of, or based upon, statements in or
omissions from that part of the Registration Statement that shall
constitute the Statements of Eligibility and Qualification under the Trust
Indenture Act of any Trustee with respect to any indenture qualified
pursuant to the Registration Statement; and provided further, that the
indemnity agreement contained in this Section 9 shall not inure to the
benefit of any Underwriter (or of any person controlling such Underwriter)
on account of any such losses, claims, damages, liabilities, expenses or
actions arising from the sale of the Preferred Trust Securities to any
person if a copy of the Prospectus (including any amendment or supplement
thereto if any amendments or supplements thereto shall have been furnished
to the Underwriters at or prior to the time of written confirmation of the
sale involved and such amendment or supplement corrected the alleged
-12-
<PAGE>
omission or alleged untrue statement in the Prospectus) (exclusive of the
Incorporated Documents) shall not have been given or sent to such person by
or on behalf of such Underwriter with or prior to the written confirmation
of the sale involved. The indemnity agreement of the Offerors contained in
this Section 9 and the representations and warranties of the Offerors
contained in Section 3 hereof shall remain operative and in full force and
effect regardless of any termination of this Agreement or of any
investigation made by or on behalf of any Underwriter or any such
controlling person, and shall survive the delivery of the Preferred Trust
Securities.
(b) Each Underwriter shall indemnify, defend and hold harmless the
Offerors, their officers and directors, and each person who controls either
of the Offerors within the meaning of Section 15 of the Securities Act,
from and against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the
Securities Act or any other statute or common law and shall reimburse each
of them for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with information
furnished in writing to the Offerors by or on behalf of such Underwriter,
through the Representatives or Counsel for the Underwriters, for use in
connection with the preparation of the Registration Statement or the
Prospectus or any amendment or supplement to either thereof. Each
Underwriter hereby furnishes to the Offerors in writing expressly for use
in the Prospectus [indicate topics addressed and location in the
Prospectus]. The indemnity agreement of the respective Underwriters
contained in this Section 9 shall remain operative and in full force and
effect regardless of any termination of this Agreement or of any
investigation made by or on behalf of either Offeror, its directors or its
officers, any such Underwriter, or any such controlling person, and shall
survive the delivery of the Preferred Trust Securities.
(c) The Company, the Trust and the several Underwriters each shall,
upon the receipt of notice of the commencement of any action against it or
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<PAGE>
any person controlling it as aforesaid, in respect of which indemnity may
be sought on account of any indemnity agreement contained herein, promptly
give written notice of the commencement thereof to the party or parties
against whom indemnity shall be sought hereunder, but the omission so to
notify such indemnifying party or parties of any such action shall not
relieve such indemnifying party or parties from any liability which it or
they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of such action, in which event
such defense shall be conducted by counsel chosen by such indemnifying
party or parties and satisfactory to the indemnified party or parties who
shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume
the defense of such action, such indemnifying party will reimburse such
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by them; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and
counsel for the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the representation by such
counsel of both the indemnifying party and the indemnified party, the
indemnified party or parties shall have the right to select separate
counsel, satisfactory to the indemnifying party, to participate in the
defense of such action on behalf of such indemnified party or parties (it
being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel representing the
indemnified parties who are parties to such action). Each of the Company
and the Underwriters agrees that without the other party's prior written
consent, which consent shall not be unreasonably withheld, it will not
settle, compromise or consent to the entry of any judgment in any claim in
respect of which indemnification may be sought under the indemnification
provisions of this Agreement, unless such settlement, compromise or consent
(i) includes an unconditional release of such other party from all
liability arising out of such claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on
behalf of such other party.
(d) If the indemnification provided for in subparagraph (a) or (b)
above shall be unenforceable under applicable law by an indemnified party,
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<PAGE>
each indemnifying party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages, liabilities and expenses
for which each such indemnification provided for in subparagraph (a) or (b)
above shall be unenforceable, in such proportion as shall be appropriate to
reflect (i) the relative fault of each indemnifying party on the one hand
and the indemnified party on the other in connection with the statements or
omissions which have resulted in such losses, claims, damages, liabilities
and expenses, (ii) the relative benefits received by the Offerors on the
one hand and the Underwriters on the other hand from the offering of the
Preferred Trust Securities pursuant to this Agreement, and (iii) any other
relevant equitable considerations; provided, however, that no indemnified
party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified party
and each such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Offerors and each of the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subparagraph (d) were to be
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute in excess of the amount equal to the excess of
(i) the total price at which the Preferred Trust Securities underwritten by
it were offered to the public, over (ii) the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission. The
obligations of each Underwriter to contribute pursuant to this Section 9
are several and not joint and shall be in proportion to the principal
amount of Preferred Trust Securities set forth opposite its name in
Schedule II hereto.
10. Termination. This Agreement may be terminated, at any time prior
-----------
to the Closing Date, by the Representatives by written notice to the Company if
(a) after the date hereof and at or prior to the Closing Date there shall have
occurred any suspension or material limitation of trading of any of the
Company's securities on the New York Stock Exchange, Inc. ("NYSE") or any
-15-
<PAGE>
general suspension of trading in securities on the NYSE, the American Stock
Exchange, Inc. ("AMEX") or the NASDAQ Stock Market, Inc. ("NASDAQ") or there
shall have been established by the NYSE, AMEX or NASDAQ or by the Commission or
by any federal or state agency or by the decision of any court, any general
limitation on prices for such trading or any general restrictions on the
distribution of securities, or a general banking moratorium declared by New York
or federal authorities, or (b) there shall have occurred any (i) new material
outbreak of hostilities or (ii) new material other national or international
calamity or crisis, including, but not limited to, an escalation of hostilities
that existed prior to the date of this Agreement or (iii) material adverse
change in the financial markets in the United States, and the effect of any such
event specified in clause (a) or (b) above on the financial markets of the
United States shall be such as to make it impracticable, in the reasonable
judgment of the Representatives, for the Underwriters to enforce contracts for
the sale of the Preferred Trust Securities. This Agreement may also be
terminated at any time prior to the Closing Date by the Representatives if, in
their reasonable judgment, the subject matter of any amendment or supplement to
the Registration Statement or the Prospectus (other than an amendment or
supplement relating solely to the activity of any Underwriter or Underwriters)
prepared and issued by the Company after the effectiveness of this Agreement
shall have disclosed a material adverse change in the business, property or
financial condition of the Company that has materially impaired the
marketability of the Preferred Trust Securities. Any termination hereof pursuant
to this Section 10 shall be without liability of any party to any other party
except as otherwise provided in Sections 6(g) and 9 hereof.
11. Miscellaneous. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT
-------------
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. This Agreement shall
inure to the benefit of the Company, the several Underwriters and, with respect
to the provisions of Section 9 hereof, each director, officer and controlling
person referred to in said Section 9, and their respective successors. Nothing
herein is intended or shall be construed to give to any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
any provision in this Agreement. The term "successor" as used herein shall not
include any purchaser, as such purchaser, of any of the Preferred Trust
Securities from any of the several Underwriters.
12. Notices. All communications hereunder shall be in writing, and,
-------
if to the Underwriters, shall be mailed or delivered to you at the address set
forth above, or, if to the Company, shall be mailed or delivered to it at 1601
Bryan Street, Dallas, Texas 75201, Attention: Treasurer.
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
-16-
<PAGE>
for that purpose, whereupon this letter and your acceptance shall constitute a
binding agreement between the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
TXU GAS COMPANY
By
------------------------------------
[NAME OF TRUST]
By
------------------------------------
(Authorized Representative)
Accepted and delivered as of
the date first above written
[REPRESENTATIVES OF UNDERWRITERS]
By:
By:
-----------------------------------
-17-
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated:
Representatives:
Designation:
Liquidation Preference Amount:
Date of Maturity:
Distribution Rate:
Purchase Price:
Underwriting Commissions (payable by the Company):
Public Offering Price:
I
<PAGE>
SCHEDULE II
-----------
[Name of Trust]
Preferred Trust Securities
Liquidation
Preference
Amount of
Preferred Trust
Name Securities
- ---- ---------------
Total ===============
$
II
<PAGE>
SCHEDULE III
------------
[LETTERHEAD OF RICHARDS, LAYTON & FINGER, P.A.]
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement, as herein defined
c/o
Re: [Name of Trust]
---------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for TXU Gas Company, a Texas
corporation (the "Company"), and [Name of Trust], a Delaware business trust (the
"Trust"), in connection with the matters set forth herein. At your request, this
opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of ,
------------
1999 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on , 1999;
(b) The Trust Agreement of the Trust, dated as of ,
------------------
1999, by and among the Company and the trustees of the Trust named therein;
(c) The Prospectus, dated _, 1999, and the Prospectus
-----------
Supplement, dated , (jointly, the "Prospectus"), relating to the
-----------
III-1
<PAGE>
Preferred Trust Securities of the Trust representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Preferred Trust
Security" and collectively, the "Preferred Trust Securities");
(d) The Amended and Restated Trust Agreement of the Trust,
dated as of , (including Exhibits A, B and D thereto) (the
------------- ------
"Trust Agreement"), among the Company, the trustees of the Trust named therein
(the "Trustees") and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust;
(e) The Underwriting Agreement, dated , (the
-------------
"Underwriting Agreement"), among the Company, the Trust and the Underwriters
named in Schedule II thereto; and
(f) A Certificate of Good Standing for the Trust, dated ,
------------
, obtained from the Secretary of State.
- -------
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (f) above, which we believe
are all the documents necessary or appropriate for us to have considered for the
purposes of rendering the opinions stated herein. In particular, we have not
reviewed any document (other than the documents listed in paragraphs (a) through
(f) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation, due formation
III-2
<PAGE>
or due organization, as the case may be, and the valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, formation or organization, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) except to the extent set forth in paragraph 2 below, that each of the
parties to the documents examined by us has the power and authority to execute
and deliver, and to perform its obligations under, such documents, (v) except to
the extent provided in paragraph 4 below, that each of the parties to the
documents examined by us has duly authorized, executed and delivered such
documents, (vi) the receipt by each Person to whom a Preferred Trust Security is
to be issued by the Trust (the "Preferred Trust Security Holders") of a
Preferred Trust Securities Certificate for the Preferred Trust Security and the
payment for the Preferred Trust Security acquired by it, in accordance with the
Trust Agreement, and as described in the Prospectus, (vii) that the Preferred
Trust Securities are issued and sold to the Preferred Trust Security Holders in
accordance with the Trust Agreement, and as described in the Prospectus,
(viii) the receipt by the Person (the "Common Trust Security Holder") to whom a
Common Trust Security of the Trust representing common undivided beneficial
interests in the assets of the Trust (each, a "Common Trust Security" and
collectively, the "Common Trust Securities") (the Preferred Trust Securities and
the Common Trust Securities being hereinafter collectively referred to as "Trust
Securities") is to be issued by the Trust of a Common Trust Securities
Certificate for the Common Trust Security and the payment for the Common Trust
Security acquired by it, in accordance with the Trust Agreement, and as
described in the Prospectus, (ix) that the Common Trust Securities are issued
and sold to the Common Trust Security Holder in accordance with the Trust
Agreement, and as described in the Prospectus, (x) that the Trust derives no
income from or connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and filing documents with the Secretary of State) or
employees in the State of Delaware, and (xi) that the Trust is treated as a
grantor trust for federal income tax purposes. We have not participated in the
preparation of the Prospectus and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
III-3
<PAGE>
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
2. Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the trust power and authority to (i) own property and conduct its
business, all as described in the Prospectus, (ii) execute and deliver, and
perform its obligations under, the Underwriting Agreement, and (iii) issue, and
perform its obligations under, the Trust Securities.
3. The Trust Agreement is a legal, valid and binding agreement of
the Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms.
4. Under the Delaware Business Trust Act and the Trust Agreement,
the execution and delivery of the Underwriting Agreement by the Trust, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all requisite trust action on the part of the Trust.
5. No authorization, approval, consent or order of any Delaware
court or Delaware governmental authority or Delaware agency is required to be
obtained by the Trust solely in connection with the issuance and sale of the
Preferred Trust Securities.
6. The Preferred Trust Securities have been duly authorized by the
Trust Agreement and, when issued and sold in accordance with the Trust
Agreement, the Preferred Trust Securities will be, subject to the qualifications
set forth in paragraph 7 below, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust.
7. The Preferred Trust Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Trust
Security Holders may be obligated, pursuant to the Trust Agreement, to
(i) provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of Preferred Trust
III-4
<PAGE>
Securities Certificates and the issuance of replacement Preferred Trust
Securities Certificates, and (ii) provide security or indemnity in connection
with requests of or directions to the Property Trustee to exercise its rights
and powers under the Trust Agreement.
8. Under the Delaware Business Trust Act and the Trust Agreement,
the issuance of the Preferred Trust Securities is not subject to preemptive
rights.
9. The issuance and sale by the Trust of the Trust Securities, the
execution, delivery and performance by the Trust of the Underwriting Agreement,
the consummation by the Trust of the transactions contemplated thereby and the
compliance by the Trust with its obligations thereunder do not violate (i) any
of the provisions of the Certificate or the Trust Agreement, or (ii) any
applicable Delaware law or Delaware administrative regulation.
10. The Preferred Trust Security Holders (other than those Preferred
Trust Security Holders who reside or are domiciled in the State of Delaware)
will have no liability for income taxes imposed by the State of Delaware solely
as a result of their participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of Delaware.
The opinion expressed in paragraph 3 above is subject, as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution.
We consent to your relying as to matters of Delaware law upon this
opinion in connection with the Underwriting Agreement. We also consent to
Winthrop, Stimson, Putnam & Roberts', Worsham, Forsythe & Wooldridge, L.L.P.'s
and Thelen Reid & Priest LLP's relying as to matters of Delaware law upon this
opinion in connection with opinions to be rendered by them on the date hereof
pursuant to the Underwriting Agreement. Further, we consent to the reliance by
The Bank of New York (in its capacity as Debenture Trustee under the
Subordinated Indenture, as trustee under the Guarantee, and as Property Trustee
under the Trust Agreement) and The Bank of New York (Delaware) (in its capacity
as Delaware Trustee under the Trust Agreement) as to matters of Delaware law
upon this opinion in connection with the matters set forth herein. Except as
III-5
<PAGE>
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
III-6
<PAGE>
Schedule IV
[LETTERHEAD OF WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.]
[Date]
as Representatives of Underwriters named in Schedule II
to the Underwriting Agreement, as herein defined
c/o
Ladies and Gentlemen:
We have acted as General Counsel to TXU Gas Company, a Texas
corporation (the "Company"), in connection with the transactions contemplated by
the Underwriting Agreement dated , 1999 among the Company, [Name of
-------------
Trust] (the "Trust") and you (the "Underwriting Agreement"), including, among
others, (i) the issuance by the Trust, a statutory business trust organized
under the Delaware Business Trust Act (the "Delaware Act"), of Preferred Trust
Securities (the "Preferred Trust Securities") having an aggregate liquidation
amount of $ 000,000, (ii) the issuance by the Company of $
------- ----------------
principal amount of its Junior Subordinated Debentures, Series (the
-----
"Debentures") and (iii) the guarantee by the Company of the Preferred Trust
Securities pursuant to a Guarantee Agreement, dated the date hereof, between the
Company and The Bank of New York, as trustee (the "Guarantee").
IV-1
<PAGE>
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, the Trust Agreement, the Indenture, the Debentures and
the Guarantee. We have also examined such other documents and satisfied
ourselves as to such other matters as we have deemed necessary as a basis for
the conclusions of law contained in the opinions expressed below. We have relied
as to various questions of fact upon the representations and warranties of the
Company contained in the Underwriting Agreement and, where we deemed
appropriate, on certificates of public officials. We have relied upon a
certificate of the Indenture Trustee as to the authentication of the Debentures.
In our examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as photostatic or certified
copies.
Upon the basis of our familiarity with these transactions and with the
affairs and properties of the Company generally, we are of the opinion that:
1. The Company is a corporation duly authorized, validly existing
and in good standing under the laws of the State of Texas, and has the corporate
power and authority: (a) to execute, deliver and perform its obligations under
the Underwriting Agreement and the Indenture, (b) to issue the Debentures and
the Guarantee and to incur the indebtedness to be evidenced thereby, and (c) to
own its property and assets and to conduct the business which it is now
conducting.
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
3. The Indenture, the Trust Agreement and the Guarantee have been
duly qualified under the Trust Indenture Act.
4. The Debentures and the Indenture have been duly authorized,
executed and delivered by the Company, the Debentures are entitled to the
benefits of the Indenture, and the Debentures and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
IV-2
<PAGE>
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
5. The Guarantee has been duly authorized, executed and delivered by
the Company, and is enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles of equity.
6. The statements made in the Prospectus under the captions
"Description of TXU Capital's Preferred Trust Securities and Common Trust
Securities," "Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the Preferred Trust Securities" and
"Certain Terms of the Junior Subordinated Debentures", insofar as they purport
to constitute summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in all material
respects;
7. Neither the Company nor the Trust is an investment company within
the meaning of the Investment Company Act of 1940, as amended.
8. The Trust is duly qualified to transact business in the State of
Texas as a foreign limited liability company. Under Texas law, the liability, if
any, of holders of Preferred Trust Securities for the debts, liabilities and
obligations of the Trust for which they are not otherwise liable by statute or
agreement will be governed by the Delaware Act.
9. Other than as stated in the Registration Statement and the
Prospectus, there are no material pending legal proceedings to which the Company
is a party or of which property of the Company is the subject which depart from
the ordinary routine litigation incident to the kind of business conducted by
the Company, and to our knowledge no such proceedings are contemplated;
10. The Registration Statement, as of the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
under the Securities Act (except for financial statements and schedules and
other financial and statistical data contained or incorporated by reference
therein and except for that part of the Registration Statement that constitutes
the Forms T-1, as to which we do not express any opinion) complied as to form in
all material respects with the Securities Act and the applicable instructions,
IV-3
<PAGE>
rules and regulations of the Commission thereunder; the Incorporated Documents
(except as to the financial statements and schedules and other financial and
statistical data contained therein, as to which we do not express any opinion),
at the time they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the applicable
instructions, rules and regulations of the Commission thereunder; and the
Registration Statement has become and is effective under the Securities Act and,
to our best knowledge, no proceedings for a stop order with respect thereto are
pending or threatened under Section 8 of the Securities Act.
11. No other approval, authorization, consent or order of any public
board or body (other than in connection or in compliance with the provisions of
the blue-sky laws of any jurisdiction) is legally required for the authorization
of the issue and sale by the Company of the Debentures and the issuance by the
Company of the Guarantee.
In the course of the preparation of the information relating to the
Company contained in the Prospectus (including the documents incorporated
therein by reference) we had discussions with certain of its officers and
representatives and certain officers and representatives of certain of its
subsidiaries, with other counsel for the Company, with Deloitte & Touche LLP,
the Company's independent certified public accountants who audited certain of
the financial statements contained in documents incorporated by reference in the
Registration Statement and the Prospectus, and with certain of your officers and
employees and your counsel, but we made no independent verification of the
accuracy or completeness of the representations and statements made to us by the
Company or the information included by the Company in the Prospectus (including
the documents incorporated therein by reference) and take no responsibility
therefor except as set forth in paragraph 6 above. However, our examination of
the information relating to the Company contained in the Registration Statement
and the Prospectus and our discussions did not disclose to us anything which
gives us reason to believe that (except as to financial statements and schedules
and other financial and statistical data and except as to that part of the
Registration Statement that constitutes the Forms T-1, as to which we do not
express any belief) (i) the Registration Statement, as of the Effective Date,
included an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the Prospectus at the time it was filed with the
IV-4
<PAGE>
Commission pursuant to Rule 424, included, or on the date hereof includes an
untrue statement of a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
We are members of the State Bar of Texas and do not hold ourselves out
as experts in the laws of the State of New York. As to all matters of New York
law, we have, with your consent, relied upon the opinion of even date herewith
of Thelen Reid & Priest LLP, New York, New York, of Counsel to the Company; as
to all matters of Delaware law, we have, with your consent, relied upon the
opinion of even date herewith of Richards, Layton & Finger, P.A., Wilmington,
Delaware, special counsel for the Company and the Trust.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By:
------------------------------------
A Partner
IV-5
<PAGE>
Schedule V
[LETTERHEAD OF THELEN REID & PRIEST LLP]
New York, New York
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement, as herein defined
c/o
Ladies and Gentlemen:
We have acted as counsel to TXU Gas Company, a Texas corporation (the
"Company"), in connection with the transactions contemplated by the Underwriting
Agreement dated , 1999 among the Company, [Name of Trust] (the
-------------
"Trust") and you (the "Underwriting Agreement"), including, among others,
(i) the issuance by the Trust, a statutory business trust organized under the
Delaware Business Trust Act (the "Delaware Act") of Preferred Trust Securities
(the "Preferred Trust Securities") having an aggregate liquidation amount of
$ ,000,000, (ii) the issuance by the Company of $ principal
------ -------------
amount of its Junior Subordinated Debentures, Series (the "Debentures")
-----
and (iii) the guarantee by the Company of the Preferred Trust Securities
pursuant to a Guarantee Agreement, dated the date hereof, between the Company
and The Bank of New York, as trustee (the "Guarantee").
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
V-1
<PAGE>
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, the Trust Agreement, the Indenture, the Debentures and
the Guarantee. We have also examined such other documents and satisfied
ourselves as to such other matters as we have deemed necessary as a basis for
the conclusions of law contained in the opinions expressed below. We have relied
as to various questions of fact upon the representations and warranties of the
Company contained in the Underwriting Agreement and, where we deemed
appropriate, on certificates of public officials. We have relied upon a
certificate of the Indenture Trustee as to the authentication of the Debentures.
In our examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as photostatic or certified
copies.
Upon the basis of our familiarity with these transactions and with the
affairs and properties of the Company generally, we are of the opinion that:
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
2. The Indenture, the Trust Agreement and the Guarantee have been
duly qualified under the Trust Indenture Act.
3. The Debentures and the Indenture have been duly authorized,
executed and delivered by the Company, the Debentures are entitled to the
benefits of the Indenture, and the Debentures and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
4. The Guarantee has been duly authorized, executed and delivered by
the Company, and is enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles of equity.
5. The statements made in the Prospectus under the captions
"Description of TXU Capital's Preferred Trust Securities and Common Trust
V-2
<PAGE>
Securities," "Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the Preferred Trust Securities" and
"Certain Terms of the Junior Subordinated Debentures" insofar as they purport to
constitute summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in all material
respects.
6. Neither the Company nor the Trust is an investment company within
the meaning of the Investment Company Act of 1940, as amended.
7. The Registration Statement as of the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
(except for the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein and except for
that part of the Registration Statement that constitutes the Forms T-1, as to
which we do not express any opinion) complied as to form in all material
respects with the Securities Act and the applicable instructions, rules and
regulations of the Commission thereunder; the Incorporated Documents (except as
to the financial statements and schedules and other financial and statistical
data contained therein, as to which we do not express any opinion), at the time
they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the applicable
instructions, rules and regulations of the Commission thereunder; and the
Registration Statement has become and is effective under the Securities Act and,
to our best knowledge, no proceedings for a stop order with respect thereto are
pending or threatened under Section 8 of the Securities Act.
8. No other approval, authorization, consent or order of any public
board or body (other than in connection or in compliance with the provisions of
the blue-sky laws of any jurisdiction) is legally required for the authorization
of the issue and sale by the Company of the Debentures and the issuance by the
Company of the Guarantee.
We herewith confirm as our opinion the statements under the caption
"Certain United States Federal Income Tax Consequences Relating to the Preferred
Trust Securities" in the Prospectus.
In the course of the preparation of the information relating to the
Company contained in the Prospectus (including the documents incorporated
therein by reference) we had discussions with certain of its officers
V-3
<PAGE>
and representatives, and certain officers and representatives of certain of its
subsidiaries, with other counsel for the Company, with Deloitte & Touche LLP,
the Company's independent certified public accountants who audited certain of
the financial statements contained in documents incorporated by reference in the
Registration Statement and the Prospectus, and with certain of your officers and
employees and your counsel, but we made no independent verification of the
accuracy or completeness of the representations and statements made to us by the
Company or the information included by the Company in the Prospectus (including
the documents incorporated therein by reference) and take no responsibility
therefor except as set forth in the immediately preceding paragraph and in
paragraph 5 above. However, our examination of the information relating to the
Company contained in the Registration Statement and the Prospectus and our
discussions did not disclose to us anything which gives us reason to believe
that (except as to financial statements and schedules and other financial and
statistical data and except as to that part of the Registration Statement that
constitutes the Forms T-1, as to which we do not express any belief) (i) the
Registration Statement, as of the Effective Date, included an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii) the
Prospectus at the time it was filed with the Commission pursuant to Rule 424,
included or on the date hereof includes an untrue statement of a material fact
or on such dates omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
We are members of the New York Bar and do not hold ourselves out as
experts in the laws of the State of Texas. As to all matters of Texas law, we
have, with your consent, relied upon the opinion of even date herewith of
Worsham, Forsythe & Wooldridge, L.L.P., Dallas, Texas, General Counsel for the
Company; as to all matters of Delaware law, we have, with your consent, relied
upon the opinion of even date herewith of Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special counsel for the Company and the Trust. We believe
that you and we are justified in relying on such opinions.
Very truly yours,
THELEN REID & PRIEST LLP
V-4
<PAGE>
SCHEDULE VI
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement as defined herein
c/o
Ladies and Gentlemen:
We have acted as counsel to you and the several Underwriters in
connection with the transactions contemplated by the Underwriting Agreement
dated , 1999 between TXU Gas Company, a Texas corporation (the
-----------
"Company"), [Name of Trust] (the "Trust") and you (the "Underwriting Agreement")
in which (i) the Trust, a statutory business trust organized under the Delaware
Business Trust Act, proposes to issue $ ,000,000 aggregate liquidation
-----
preference amount of its Preferred Trust Securities (the "Preferred Trust
Securities"), (ii) the Company proposes to issue $ principal amount
-------------
of its Junior Subordinated Debentures, Series , (the "Debentures") and
------
(iii) the Company proposes to guarantee the Preferred Trust Securities to the
extent described in the Prospectus. Terms not otherwise defined herein are used
with the meanings ascribed to them in the Underwriting Agreement.
We are members of the New York Bar and do not hold ourselves out as
experts on the laws of the State of Texas. We have, with your consent, relied
VI-1
<PAGE>
upon an opinion of even date herewith addressed to you by Worsham, Forsythe &
Wooldridge, L.L.P., Dallas, Texas, General Counsel for the Company, as to the
matters covered in such opinion relating to Texas law. We have reviewed such
opinion and believe that it is satisfactory and that you and we are justified in
relying thereon. We understand that you are relying, for all matters of Delaware
law, upon an opinion of even date herewith addressed to you by Richards, Layton
& Finger, P.A., Delaware Counsel for the Company.
We have, in addition, examined the documents described in the list of
closing papers as having been delivered to you at the closing and such other
documents and satisfied ourselves as to such other matters as we have deemed
necessary in order to enable us to express this opinion. As to various questions
of fact material to this opinion, we have relied upon representations of the
Company and statements in the Registration Statement hereinafter mentioned. In
such examination we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us and the genuineness and conformity
to original documents of documents submitted to us as certified or photostatic
copies.
Based upon the foregoing, we are of the opinion that:
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
2. The Indenture has been duly qualified under the Trust Indenture
Act.
3. The Debentures and the Indenture have been duly authorized,
executed and delivered by the Company, the Debentures are entitled to the
benefits of the Indenture, and the Debentures and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
4. The Guarantee has been duly authorized, executed and delivered by
the Company, and is enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles of equity.
VI-2
<PAGE>
5. The statements made in the Prospectus under the captions
"Description of TXU Capital's Preferred Trust Securities and Common Trust
Securities," "Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the Preferred Trust Securities", and
"Certain Terms of the Junior Subordinated Debentures", insofar as they purport
to constitute summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in all material
respects.
6. Neither the Company nor the Trust is, or after giving effect to
the issuance and sale of the Preferred Trust Securities, will be, and neither
the Company nor the Trust is directly or indirectly controlled by, or acting on
behalf of any person which is, an investment company within the meaning of the
Investment Company Act of 1940.
7. No other approval, authorization, consent or order of any public
board or body (other than in connection or in compliance with the blue-sky laws
of any jurisdiction) is legally required for the authorization of the issue and
sale by the Company of the Debentures and the issuance by the Company of the
Guarantee as contemplated in the Underwriting Agreement.
8. The Registration Statement, at the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
(except in each case as to financial statements and schedules and other
financial and statistical data contained or incorporated by reference therein
and except for that part of the Registration Statement that constitutes the
Forms T-1, as to which we do not express any opinion), complied as to form in
all material respects with the Securities Act and the applicable instructions,
rules and regulations of the Commission thereunder.
In passing upon the form of the Registration Statement and the form of
the Prospectus, we necessarily assume the correctness and completeness of the
statements made by the Company and the information included in the Registration
Statement and the Prospectus and take no responsibility therefor, except insofar
as such statements relate to us and as set forth in paragraph 5 above. In the
course of the preparation by the Company of the Registration Statement and the
Prospectus, we have had discussions with certain of the Company's officers and
representatives, and representatives of certain of its subsidiaries, with
counsel for the Company, with Deloitte & Touche LLP, the Company's independent
VI-3
<PAGE>
public accountants who audited certain of the financial statements contained in
documents incorporated by reference in the Registration Statement and the
Prospectus, and with certain of your representatives. Our examination of the
Registration Statement and the Prospectus and our discussions did not disclose
to us any information which gives us reason to believe that at the Effective
Date the Registration Statement contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus, at the
time it was filed with the Commission pursuant to Rule 424, or at the date
hereof, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. We do not express any opinion or belief as to the financial
statements and schedules or other financial or statistical data contained or
incorporated by reference in the Registration Statement or Prospectus or as to
that part of the Registration Statement that constitutes the Forms T-1.
This opinion is given to you solely for the use of the several
Underwriters in connection with the Underwriting Agreement and the transactions
contemplated thereunder and may not be relied upon by any other person or for
any other purpose.
Very truly yours,
VI-4
TXU GAS COMPANY
OFFICER'S CERTIFICATE
[ , the ] of TXU Gas Company
-------------------------- ---------------
(the "Company"), pursuant to the authority granted in the Board Resolutions of
the Company dated , , and Sections 201 and 301 of the Indenture
----------- ----
defined herein, does hereby certify to The Bank of New York (the "Trustee"), as
Trustee under the Indenture of the Company (For Unsecured Debt Securities) dated
as of January 1, 1998 (the "Indenture") that:
1. The securities of the series to be issued under the
-----
Indenture shall be designated " % Series Notes due
-- -
" (the "Series Notes"). All capitalized terms
--------------- -
used in this certificate which are not defined herein but are
defined in the Indenture shall have the meanings set forth in
the Indenture;
[2. The Series Notes shall be limited in aggregate principal
-
amount to $ at any time Outstanding, except as
-----------
contemplated in Section 301(b) of the Indenture;]
3. The Series Notes shall mature and the principal shall be due
-
and payable together with all accrued and unpaid interest
thereon on , ;
--------- ----
4. The Series Notes shall bear interest, at the rate of %
- --
per annum payable semi-annually on and of
------ ---------
each year (each, an "Interest Payment Date") commencing
, . The amount of interest payable for any such
------ ----
period will be computed on the basis of a 360-day year of
twelve 30-day months. Interest on the Series Notes will
-
accrue from the date of issuance thereof but if interest has
been paid on such Series _ Notes, then from the most recent
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 such Interest Payment Date;
5. Each installment of interest on a Series Note shall be
-
payable to the Person in whose name such Series Note is
-
registered at the close of business on the day of the
----
calendar month next preceding the corresponding Interest
Payment Date (the "Regular Record Date") for the Series
-
Notes. Any installment of interest on the Series Notes not
-
punctually paid or duly provided for shall forthwith cease to
be payable to the Holders of such Series Notes on such
-
Regular Record Date, and may be paid to the Persons in whose
name the Series Notes are registered at the close of
-
business on a Special Record Date to be fixed by the Trustee
for the payment of such Defaulted Interest. Notice of such
Defaulted Interest and Special Record Date shall be given to
the Holders of the Series Notes not less than 10 days prior
-
to such Special Record Date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of
any securities exchange on which the Series Notes may be
-
listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture;
6. The principal and each installment of interest on the Series
Notes shall be payable at, and registration and
-
registration of transfers and exchanges in respect of the
Series Notes may be effected at, the office or agency of the
-
Company in The City of New York; provided that payment of
interest may be made at the option of the Company by check
mailed to the address of the persons entitled thereto.
Notices and demands to or upon the Company in respect of the
Series _ Notes may be served at the office or agency of the
Company in The City of New York. The Corporate Trust Office of
the Trustee will initially be the agency of the Company for
such payment, registration and registration of transfers and
exchanges and service of notices and demands and the Company
hereby appoints the Trustee as its agent for all such
purposes; provided, however, that the Company reserves the
right to change, by one or more Officer's Certificates, any
such office or agency and such agent. The Trustee will be the
Security Registrar and the Paying Agent for the Series _
Notes;
7. [The Series Notes will be redeemable as a whole at any time
-
or in part from time to time, at the option of the Company,
upon not less than 30 nor more than 60 days' notice given as
provided in the Indenture, at a Redemption Price equal to
% of the principal amount of such Series Notes, plus
------ -
accrued interest on the principal amount thereof to the
Redemption Date.]
8. The Series Notes will be originally issued in global form
-
payable to Cede & Co. and will, unless and until the Series
-
Notes are exchanged in whole or in part for certificated
Series Notes registered in the names of various beneficial
-
holders thereof (in accordance with the conditions set forth
in the legend appearing in the form of the Series Notes,
-
hereto attached as Exhibit A), contain restrictions on
transfer, substantially as described in such form;
9. No service charge shall be made for the registration of
transfer or exchange of the Series Notes; provided, however,
-
that the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed
in connection with the exchange or transfer;
10. If the Company shall make any deposit of money and/or Eligible
Obligations with respect to any Series Notes, or any portion
-
of the principal amount thereof, as contemplated by Section
701 of the Indenture, the Company shall not deliver an
Officer's Certificate described in clause (z) in the first
paragraph of said Section 701 unless the Company shall also
deliver to the Trustee, together with such Officer's
Certificate, either:
(A) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Series Notes, shall assume
-
the obligation (which shall be absolute and unconditional) to
irrevocably deposit with the Trustee or Paying Agent such
additional sums of money, if any, or additional Eligible
Obligations (meeting the requirements of Section 701), if any,
or any combination thereof, at such time or times, as shall be
necessary, together with the money and/or Eligible Obligations
theretofore so deposited, to pay when due the principal of and
premium, if any, and interest due and to become due on such
Series Notes or portions thereof, all in accordance with and
-
subject to the provisions of said Section 701; provided,
however, that such instrument may state that the obligation of
the Company to make additional deposits as aforesaid shall be
subject to the delivery to the Company by the Trustee of a
notice asserting the deficiency accompanied by an opinion of
an independent public accountant of nationally recognized
standing, selected by the Trustee, showing the calculation
thereof; or
(B) an Opinion of Counsel to the effect that, as a
result of a change in law occurring after the date of this
certificate, the Holders of such Series Notes, or portions
-
of the principal amount thereof, will not recognize income,
gain or loss for United States federal income tax purposes as
a result of the satisfaction and discharge of the Company's
indebtedness in respect thereof and will be subject to United
States federal income tax on the same amounts, at the same
times and in the same manner as if such satisfaction and
discharge had not been effected.
11. The Series Notes shall have such other terms and provisions
-
as are provided in the form set forth in Exhibit A hereto, and
shall be issued in substantially such form;
12. The undersigned has read all of the covenants and conditions
contained in the Indenture and the definitions in the
Indenture relating thereto, relating to the issuance of the
Series Notes and in respect of compliance with which this
-
certificate is made;
13. The statements contained in this certificate are based upon
the familiarity of the undersigned with the Indenture, the
documents accompanying this certificate, and upon discussions
by the undersigned with officers and employees of the Company
familiar with the matters set forth herein;
14. In the opinion of the undersigned, the undersigned has made
such examination or investigation as is necessary to enable
him to express an informed opinion whether or not such
covenants and conditions have been complied with; and
15. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including any
covenants compliance with which constitutes a condition
precedent) to the authentication and delivery of the Series _
Notes requested in the accompanying Company Order have been
complied with.
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's Certificate this
day of , .
- ---- ------ ----
---------------------------------
<PAGE>
NO.
---------------
CUSIP NO.
----------
EXHIBIT A
[FORM OF FACE OF SERIES NOTE]
-
[(SEE LEGEND AT THE END OF THIS SECURITY FOR
RESTRICTIONS ON TRANSFERABILITY AND CHANGE OF FORM)]
TXU GAS COMPANY
% SERIES NOTES DUE ,
-- - --------- ----
TXU GAS 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 [Cede & Co.] or registered assigns, the principal sum of
- ----------------------------------------------------------------------------
Dollars on , , and to pay interest on said principal sum,
--------- ----
semi-annually on and of each year, commencing , , at
------ --------- ------ ----
the rate of % per annum until the principal hereof is paid or made available
--
for payment. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. 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 Regular Record Date for such interest, which shall be the
----
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.
TXU GAS COMPANY
By:
----------------------------------
ATTEST:
- ----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
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>
[FORM OF REVERSE OF SERIES 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, 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 , 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 $ ].
-----------
The Securities of this series will be redeemable as a whole at
any time or in part from time to time, at the option of the Company, upon not
less than 30 nor more than 60 days' notice given as provided in the Indenture,
at a Redemption Price equal to % of the principal amount of such Securities
----
of this series.
Unless the Company defaults in payment of the Redemption
Price, on and after the Redemption Date interest will cease to accrue on the
Securities of this series or portions thereof called for redemption.
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, including the Officer's Certificate
described above.
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 contains provisions permitting the Holders of a majority in aggregate
principal amount of the Securities of all series then Outstanding to waive
compliance by the Company with certain restrictive provisions of the Indenture.
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
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 $ and any integral multiple
-----
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.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
<PAGE>
[LEGEND
Unless and until this Security is exchanged in whole or in part for
certificated Securities registered in the names of the various beneficial
holders hereof as then certified to the Trustee by The Depository Trust Company
(55 Water Street, New York, New York) or its successor (the "Depositary"), this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Unless this certificate is presented by an authorized representative of
the Depositary to the Company or its agent for registration of transfer,
exchange or payment, and any certificate to be issued is registered in the name
of Cede & Co., or such other name as requested by an authorized representative
of the Depositary and any amount payable thereunder is made payable to Cede &
Co., or such other name, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.
This Security may be exchanged for certificated Securities registered
in the names of the various beneficial owners hereof if (a) the Depositary is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, or (b) the Company
elects to issue certificated Securities to beneficial owners. Any such exchange
shall be made upon receipt by the Trustee of a Company Order therefor and
certificated Securities of this series shall be registered in such names and in
such denominations as shall be certified to the Company and the Trustee by the
Depositary.]
TRUST AGREEMENT
OF TXU GAS CAPITAL II
This TRUST AGREEMENT of TXU Gas Capital II (the "Trust"),
dated as of August 18, 1999, among (i) TXU Gas Company, a Texas corporation (the
"Depositor"), (ii) The Bank of New York, a New York banking corporation (the
"Property Trustee"), as trustee of the Trust, (iii) The Bank of New York
(Delaware), a Delaware banking corporation (the "Delaware Trustee"), as trustee
of the Trust, and (iv) Laura Anderson, an individual employed by the Depositor
or one of its affiliates, as trustee of the Trust (the "Administrative
Trustee")(the Administrative Trustee, together with any administrative trustees
appointed by the Depositor after the date hereof, the "Administrative
Trustees")(each of such trustees in (ii), (iii) and (iv) a "Trustee" and
collectively, the "Trustees"). The Depositor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "TXU Gas Capital
II", in which name the Trustees, or the Depositor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Depositor hereby assigns, transfers, conveys and sets
over to the Trustees the sum of $10. The Trustees hereby acknowledge receipt of
such amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the trust
estate in trust for the Depositor. It is the intention of the parties hereto
that the Trust created hereby constitute a business trust under Chapter 38 of
Title 12 of the Delaware Code, 12 Del. C. S. 3801 et seq. (the "Business
------- -- ---
Trust Act"), and that this document constitutes the governing instrument of the
Trust. The Trustees are hereby authorized and directed to execute and file a
certificate of trust with the Secretary of State of the State of Delaware in
accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended
and restated Trust Agreement, satisfactory to each such party and substantially
in the form to be included as an exhibit to the 1933 Act Registration Statement
referred to below, to provide for the contemplated operation of the Trust
created hereby and the issuance of the Preferred Trust Securities and Common
Trust Securities referred to therein. Prior to the execution and delivery of
such amended and restated Trust Agreement, the Trustees shall not have any duty
or obligation hereunder or with respect of the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct
each of the Administrative Trustees, and the Depositor, acting singly or
together, (and, in the case of (iv) below, Robert J. Reger, Jr., as authorized
representative of the Trust) (i) to prepare and file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) a Registration Statement on Form S-3 (the "1933 Act Registration
Statement") (including any pre-effective or post-effective amendments thereto),
relating to the registration under the Securities Act of 1933, as amended, of
the Preferred Trust Securities of the Trust and certain other securities and (b)
a Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Trust Securities of the Trust under Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended; (ii) to
prepare and file with The New York Stock Exchange, Inc. (the "Exchange") and
execute on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Trust Securities to be listed on the
Exchange, (iii) to prepare and file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Trust Securities under the
securities or blue sky laws of such jurisdictions as the Depositor or the
Administrative Trustee, on behalf of the Trust, may deem necessary or desirable
and (iv) to execute and deliver, on behalf of the Trust, an underwriting
agreement in respect of the sale of the Preferred Trust Securities in such form
as the Depositor shall approve. In the event that any filing referred to above
is required by the rules and regulations of the Commission, the Exchange or
state securities or blue sky laws, to be executed on behalf of the Trust by one
or more of the Trustees, each of the Trustees, in its or her capacity as
Trustee of the Trust, is hereby authorized and, to the extent so required,
directed to join in any such filing and to execute on behalf of the Trust any
and all of the foregoing, it being understood that the Property Trustee and the
Delaware Trustee, in their capacities as Trustees of the Trust, respectively,
shall not be required to join in any such filing or execute on behalf of the
Trust any such document unless required by the rules and regulations of the
Commission, the Exchange or state securities or blue sky laws. In connection
with the filings referred to above, the Depositor and each Trustee, solely in
its or her capacity as trustee of the Trust, hereby constitutes and appoints
Robert A. Wooldridge, Peter B. Tinkham and Robert J. Reger, Jr., and each of
them, as its or his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for the Depositor or such Trustee or
in the Depositor's or such Trustee's name, place and stead, in any and all
capacities, to sign any and all filings and amendments (including
post-effective amendments) to any of such filings (including the 1933 Act
Registration Statement and the 1934 Act Registration Statement) and to file
the same, with all exhibits thereto and other documents in connection therewith,
with the Commission, the Exchange and securities or blue sky administrators,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as the Depositor or
such Trustee might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their respective
substitute or substitutes, shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall be either a natural
person who is a resident of the State of Delaware, or, if not a natural person,
an entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. Any one or more of the Trustees may resign upon thirty
days prior written notice to Depositor.
7. The Depositor shall have the right to dissolve the Trust at
any time prior to the issuance of any Preferred Trust Security. Upon dissolution
of the Trust pursuant to this Section 7, each of the Administrative Trustees,
acting singly, is hereby authorized to prepare, execute and file a Certificate
of Cancellation in respect of the Trust with the Secretary of State of the
State of Delaware.
8. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
TXU GAS COMPANY,
as Depositor
By: /s/ Kirk R. Oliver
--------------------------------------
Name: Kirk R. Oliver
Title: Treasurer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Walter N. Gitlin
--------------------------------------
Name: Walter N. Gitlin
Title: Vice President
THE BANK OF NEW YORK
(DELAWARE), as Trustee
By: /s/ Walter N. Gitlin
--------------------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
Laura Anderson, as Trustee
By: /s/ Laura Anderson
--------------------------------------
<PAGE>
CERTIFICATE OF TRUST
OF
TXU GAS CAPITAL II
THIS CERTIFICATE OF TRUST of TXU Gas Capital II (the
"Trust"), dated as of August 18, 1999, is being duly executed
----
and filed by the undersigned, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del.C. S. 3801 et
------ --
seq.).
---
1. Name. The name of the business trust formed
hereby is TXU Gas Capital II.
2. Delaware Trustee. The name and business address
of the trustee of the Trust with a principal place of business in
the State of Delaware are The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall
be effective upon filing.
IN WITNESS WHEREOF, the undersigned, being the only
trustees of the Trust, have executed this Certificate of Trust as
of the date first above written.
THE BANK OF NEW YORK, LAURA ANDERSON
not in its individual capacity not in here individual capacity
but solely as trustee but solely as trustee
By: /s/ Walter N. Gitlin /s/ Laura Anderson
------------------------ ------------------------------
Name: WALTER N. GITLIN
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity
but solely as trustee
By: /s/ Walter N. Gitlin
-------------------------------
Name: WALTER N. GITLIN
Title: Authorized Signatory
TRUST AGREEMENT
OF TXU GAS CAPITAL III
This TRUST AGREEMENT of TXU Gas Capital III (the
"Trust"), dated as of August 18, 1999, among (i) TXU Gas Company,
a Texas corporation (the "Depositor"), (ii) The Bank of New York,
a New York banking corporation (the "Property Trustee"), as
trustee of the Trust, (iii) The Bank of New York (Delaware), a
Delaware banking corporation (the "Delaware Trustee"), as trustee
of the Trust, and (iv) Laura Anderson, an individual employed by
the Depositor or one of its affiliates, as trustee of the Trust
(the "Administrative Trustee")(the Administrative Trustee,
together with any administrative trustees appointed by the
Depositor after the date hereof, the "Administrative Trust-
ees")(each of such trustees in (ii), (iii) and (iv) a "Trustee"
and collectively, the "Trustees"). The Depositor and the Trust-
ees hereby agree as follows:
1. The trust created hereby shall be known as "TXU
Gas Capital III", in which name the Trustees, or the Depositor to
the extent provided herein, may conduct the business of the
Trust, make and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. S.3801 et seq. (the "Business Trust Act"), and that
------- -- ---
this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and
file a certificate of trust with the Secretary of State of the
State of Delaware in accordance with the provisions of the
Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Trust Agreement, satisfactory to each such
party and substantially in the form to be included as an exhibit
to the 1933 Act Registration Statement referred to below, to
provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Trust Securities and
Common Trust Securities referred to therein. Prior to the
execution and delivery of such amended and restated Trust Agree-
ment, the Trustees shall not have any duty or obligation hereun-
der or with respect of the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior
to such execution and delivery any licenses, consents or approv-
als required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize
and direct each of the Administrative Trustees, and the Deposi-
tor, acting singly or together, (and, in the case of (iv) below,
Robert J. Reger, Jr., as authorized representative of the Trust)
(i) to prepare and file with the Securities and Exchange Commis-
sion (the "Commission") and execute, in each case on behalf of
the Trust, (a) a Registration Statement on Form S-3 (the "1933
Act Registration Statement") (including any pre-effective or
post-effective amendments thereto), relating to the registration
under the Securities Act of 1933, as amended, of the Preferred
Trust Securities of the Trust and certain other securities and
(b) a Registration Statement on Form 8-A (the "1934 Act Registra-
tion Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred
Trust Securities of the Trust under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended; (ii) to prepare and
file with The New York Stock Exchange, Inc. (the "Exchange") and
execute on behalf of the Trust a listing application and all
other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Preferred Trust Securities to be listed on the Exchange, (iii) to
prepare and file and execute on behalf of the Trust such applica-
tions, reports, surety bonds, irrevocable consents, appointments
of attorney for service of process and other papers and documents
as shall be necessary or desirable to register the Preferred
Trust Securities under the securities or blue sky laws of such
jurisdictions as the Depositor or the Administrative Trustee, on
behalf of the Trust, may deem necessary or desirable and (iv) to
execute and deliver, on behalf of the Trust, an underwriting
agreement in respect of the sale of the Preferred Trust Securi-
ties in such form as the Depositor shall approve. In the event
that any filing referred to above is required by the rules and
regulations of the Commission, the Exchange or state securities
or blue sky laws, to be executed on behalf of the Trust by one or
more of the Trustees, each of the Trustees, in its or her capaci-
ty as Trustee of the Trust, is hereby authorized and, to the
extent so required, directed to join in any such filing and to
execute on behalf of the Trust any and all of the foregoing, it
being understood that the Property Trustee and the Delaware
Trustee, in their capacities as Trustees of the Trust, respec-
tively, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required
by the rules and regulations of the Commission, the Exchange or
state securities or blue sky laws. In connection with the
filings referred to above, the Depositor and each Trustee, solely
in its or her capacity as trustee of the Trust, hereby consti-
tutes and appoints Robert A. Wooldridge, Peter B. Tinkham and
Robert J. Reger, Jr., and each of them, as its or his true and
lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for the Depositor or such Trustee or in
the Depositor's or such Trustee's name, place and stead, in any
and all capacities, to sign any and all filings and amendments
(including post-effective amendments) to any of such filings
(including the 1933 Act Registration Statement and the 1934 Act
Registration Statement) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the
Commission, the Exchange and securities or blue sky administra-
tors, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as the Depositor or such
Trustee might or could do in person, hereby ratifying and con-
firming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or
more counterparts.
6. The number of Trustees initially shall be three
(3) and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed
by the Depositor which may increase or decrease the number of
Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall be either a natural person
who is a resident of the State of Delaware, or, if not a natural
person, an entity which has its principal place of business in
the State of Delaware and otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor
is entitled to appoint or remove without cause any Trustee at any
time. Any one or more of the Trustees may resign upon thirty
days prior written notice to Depositor.
7. The Depositor shall have the right to dissolve the
Trust at any time prior to the issuance of any Preferred Trust
Security. Upon dissolution of the Trust pursuant to this Section
7, each of the Administrative Trustees, acting singly, is hereby
authorized to prepare, execute and file a Certificate of Cancel-
lation in respect of the Trust with the Secretary of State of the
State of Delaware.
8. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed as of the day and year first
above written.
TXU GAS COMPANY,
as Depositor
By: /s/ Kirk R. Oliver
----------------------------
Name: Kirk R. Oliver
Title: Treasurer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Walter N. Gitlin
----------------------------
Name: Walter N. Gitlin
Title: Vice President
THE BANK OF NEW YORK
(DELAWARE), as Trustee
By: /s/ Walter N. Gitlin
----------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
Laura Anderson, as Trustee
By: /s/ Laura Anderson
----------------------------
<PAGE>
CERTIFICATE OF TRUST
OF
TXU GAS CAPITAL III
THIS CERTIFICATE OF TRUST of TXU Gas Capital III (the
"Trust"), dated as of August 18, 1999, is being duly executed
----
and filed by the undersigned, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del.C. S. 3801 et
------ --
seq.).
---
1. Name. The name of the business trust formed
hereby is TXU Gas Capital III.
2. Delaware Trustee. The name and business address
of the trustee of the Trust with a principal place of business in
the State of Delaware are The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall
be effective upon filing.
IN WITNESS WHEREOF, the undersigned, being the only
trustees of the Trust, have executed this Certificate of Trust as
of the date first above written.
THE BANK OF NEW YORK, LAURA ANDERSON
not in its individual capacity not in here individual capacity
but solely as trustee but solely as trustee
By: /s/ Walter N. Gitlin /s/ Laura Anderson
------------------------ ------------------------------
Name: WALTER N. GITLIN
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity
but solely as trustee
By: /s/ Walter N. Gitlin
-------------------------------
Name: WALTER N. GITLIN
Title: Authorized Signatory
TRUST AGREEMENT
OF TXU GAS CAPITAL IV
This TRUST AGREEMENT of TXU Gas Capital IV (the
"Trust"), dated as of August 18, 1999, among (i) TXU Gas Company,
a Texas corporation (the "Depositor"), (ii) The Bank of New
York, a New York banking corporation (the "Property Trustee"), as
trustee of the Trust, (iii) The Bank of New York (Delaware), a
Delaware banking corporation (the "Delaware Trustee"), as trustee
of the Trust, and (iv) Laura Anderson, an individual employed by
the Depositor or one of its affiliates, as trustee of the Trust
(the "Administrative Trustee")(the Administrative Trustee,
together with any administrative trustees appointed by the
Depositor after the date hereof, the "Administrative Trust-
ees")(each of such trustees in (ii), (iii) and (iv) a "Trustee"
and collectively, the "Trustees"). The Depositor and the Trust-
ees hereby agree as follows:
1. The trust created hereby shall be known as "TXU
Gas Capital IV", in which name the Trustees, or the Depositor to
the extent provided herein, may conduct the business of the
Trust, make and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. S.3801 et seq. (the "Business Trust Act"), and that
------- -- ---
this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and
file a certificate of trust with the Secretary of State of the
State of Delaware in accordance with the provisions of the
Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Trust Agreement, satisfactory to each such
party and substantially in the form to be included as an exhibit
to the 1933 Act Registration Statement referred to below, to
provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Trust Securities and
Common Trust Securities referred to therein. Prior to the
execution and delivery of such amended and restated Trust Agree-
ment, the Trustees shall not have any duty or obligation hereun-
der or with respect of the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior
to such execution and delivery any licenses, consents or approv-
als required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize
and direct each of the Administrative Trustees, and the Deposi-
tor, acting singly or together, (and, in the case of (iv) below,
Robert J. Reger, Jr., as authorized representative of the Trust)
(i) to prepare and file with the Securities and Exchange Commis-
sion (the "Commission") and execute, in each case on behalf of
the Trust, (a) a Registration Statement on Form S-3 (the "1933
Act Registration Statement") (including any pre-effective or
post-effective amendments thereto), relating to the registration
under the Securities Act of 1933, as amended, of the Preferred
Trust Securities of the Trust and certain other securities and
(b) a Registration Statement on Form 8-A (the "1934 Act Registra-
tion Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred
Trust Securities of the Trust under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended; (ii) to prepare and
file with The New York Stock Exchange, Inc. (the "Exchange") and
execute on behalf of the Trust a listing application and all
other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Preferred Trust Securities to be listed on the Exchange, (iii) to
prepare and file and execute on behalf of the Trust such applica-
tions, reports, surety bonds, irrevocable consents, appointments
of attorney for service of process and other papers and documents
as shall be necessary or desirable to register the Preferred
Trust Securities under the securities or blue sky laws of such
jurisdictions as the Depositor or the Administrative Trustee, on
behalf of the Trust, may deem necessary or desirable and (iv) to
execute and deliver, on behalf of the Trust, an underwriting
agreement in respect of the sale of the Preferred Trust Securi-
ties in such form as the Depositor shall approve. In the event
that any filing referred to above is required by the rules and
regulations of the Commission, the Exchange or state securities
or blue sky laws, to be executed on behalf of the Trust by one or
more of the Trustees, each of the Trustees, in its or her capaci-
ty as Trustee of the Trust, is hereby authorized and, to the
extent so required, directed to join in any such filing and to
execute on behalf of the Trust any and all of the foregoing, it
being understood that the Property Trustee and the Delaware
Trustee, in their capacities as Trustees of the Trust, respec-
tively, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required
by the rules and regulations of the Commission, the Exchange or
state securities or blue sky laws. In connection with the
filings referred to above, the Depositor and each Trustee, solely
in its or her capacity as trustee of the Trust, hereby consti-
tutes and appoints Robert A. Wooldridge, Peter B. Tinkham and
Robert J. Reger, Jr., and each of them, as its or his true and
lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for the Depositor or such Trustee or in
the Depositor's or such Trustee's name, place and stead, in any
and all capacities, to sign any and all filings and amendments
(including post-effective amendments) to any of such filings
(including the 1933 Act Registration Statement and the 1934 Act
Registration Statement) and to file the same, with all exhibits
thereto and other documents in connection therewith, with the
Commission, the Exchange and securities or blue sky administra-
tors, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as the Depositor or such
Trustee might or could do in person, hereby ratifying and con-
firming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or
more counterparts.
6. The number of Trustees initially shall be three
(3) and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed
by the Depositor which may increase or decrease the number of
Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall be either a natural person
who is a resident of the State of Delaware, or, if not a natural
person, an entity which has its principal place of business in
the State of Delaware and otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor
is entitled to appoint or remove without cause any Trustee at any
time. Any one or more of the Trustees may resign upon thirty
days prior written notice to Depositor.
7. The Depositor shall have the right to dissolve the
Trust at any time prior to the issuance of any Preferred Trust
Security. Upon dissolution of the Trust pursuant to this Section
7, each of the Administrative Trustees, acting singly, is hereby
authorized to prepare, execute and file a Certificate of Cancel-
lation in respect of the Trust with the Secretary of State of the
State of Delaware.
8. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed as of the day and year first
above written.
TXU GAS COMPANY,
as Depositor
By: /s/ Kirk R. Oliver
-------------------------------
Name: Kirk R. Oliver
Title: Treasurer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Walter N. Gitlin
--------------------------------
Name: Walter N. Gitlin
Title: Vice President
THE BANK OF NEW YORK
(DELAWARE), as Trustee
By: /s/ Walter N. Gitlin
--------------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
Laura Anderson, as Trustee
By: /s/ Laura Anderson
--------------------------------
<PAGE>
CERTIFICATE OF TRUST
OF
TXU GAS CAPITAL IV
THIS CERTIFICATE OF TRUST of TXU Gas Capital IV (the
"Trust"), dated as of August 18, 1999, is being duly executed
----
and filed by the undersigned, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del.C. S. 3801 et
------ --
seq.).
---
1. Name. The name of the business trust formed
hereby is TXU Gas Capital IV.
2. Delaware Trustee. The name and business address
of the trustee of the Trust with a principal place of business in
the State of Delaware are The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall
be effective upon filing.
IN WITNESS WHEREOF, the undersigned, being the only
trustees of the Trust, have executed this Certificate of Trust as
of the date first above written.
THE BANK OF NEW YORK, LAURA ANDERSON
not in its individual capacity not in here individual capacity
but solely as trustee but solely as trustee
By: /s/ Walter N. Gitlin /s/ Laura Anderson
------------------------ ------------------------------
Name: WALTER N. GITLIN
Title: Vice President
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity
but solely as trustee
By: /s/ Walter N. Gitlin
-------------------------------
Name: WALTER N. GITLIN
Title: Authorized Signatory
===============================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
between
TXU GAS COMPANY, as Depositor
and
THE BANK OF NEW YORK,
THE BANK OF NEW YORK (DELAWARE),
-----------------,
-----------------,
-----------------,
-----------------,
and
_____________, as Trustees
Dated as of ______, ____
[NAME OF TRUST]
===============================================================================
<PAGE>
[NAME OF TRUST]
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
- --------------- ---------------
Section 310(a)(1) ........................................... 8.07
(a)(2) ........................................... 8.07
(a)(3) ........................................... 8.09
(a)(4) ........................................... Not Applicable
(b) .............................................. 8.08
Section 311(a) .............................................. 8.13
(b) .............................................. 8.13
Section 312(a) .............................................. 5.07
(b) .............................................. 5.07
(c) .............................................. 5.07
Section 313(a) .............................................. 8.14(a)
(a)(4) ........................................... 8.14(b)
(b) .............................................. 8.14(b)
(c) .............................................. 8.14(a)
(d) .............................................. 8.14(a), 8.14(b)
Section 314(a) .............................................. Not Applicable
(b) .............................................. Not Applicable
(c)(1) ........................................... Not Applicable
(c)(2) ........................................... Not Applicable
(c)(3) ........................................... Not Applicable
(d) .............................................. Not Applicable
(e) .............................................. Not Applicable
Section 315(a) .............................................. 8.01
(b) .............................................. 8.02, 8.14(b)
(c) .............................................. 8.01(a)
(d) .............................................. 8.01, 8.03
(e) .............................................. Not Applicable
Section 316(a) .............................................. Not Applicable
(a)(1)(A) ........................................ Not Applicable
(a)(1)(B) ........................................ Not Applicable
(a)(2) ........................................... Not Applicable
(b) .............................................. Not Applicable
(c) .............................................. Not Applicable
Section 317(a)(1) ........................................... Not Applicable
(a)(2) ........................................... Not Applicable
(b) .............................................. 5.09
Section 318(a) .............................................. 10.10
- ---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Defined Terms
Section 1.01 Definitions .................................................... 2
ARTICLE II
Establishment of the Trust
Section 2.01 Name .......................................................... 11
Section 2.02 Office of the Delaware Trustee; Principal Place of Business ... 11
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses ................................................... 11
Section 2.04 Issuance of the Preferred Trust Securities .................... 11
Section 2.05 Subscription and Purchase of Debentures; Issuance of the
Common Trust Securities .................................... 11
Section 2.06 Declaration of Trust; Appointment of Additional
Administrative Trustees .................................... 12
Section 2.07 Authorization to Enter into Certain Transactions .............. 12
Section 2.08 Assets of Trust ............................................... 15
Section 2.09 Title to Trust Property ....................................... 16
ARTICLE III
Payment Account
Section 3.01 Payment Account ............................................... 16
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions ................................................. 16
Section 4.02 Redemption .................................................... 17
Section 4.03 Subordination of Common Trust Securities ...................... 19
Section 4.04 Payment Procedures ............................................ 20
Section 4.05 Tax Returns and Reports ....................................... 20
Section 4.06 Payments under Indenture ...................................... 20
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership ............................................. 21
Section 5.02 The Trust Securities Certificates ............................. 21
Section 5.03 Execution and Delivery of Trust Securities Certificates ....... 21
-i-
<PAGE>
Section 5.04 Registration of Transfer and Exchange of Trust
Securities Certificates .................................... 21
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates ............................................... 22
Section 5.06 Persons Deemed Securityholders ................................ 23
Section 5.07 Access to List of Securityholders' Names and Addresses ........ 23
Section 5.08 Maintenance of Office or Agency ............................... 23
Section 5.09 Appointment of Paying Agent ................................... 24
Section 5.10. Ownership of Common Trust Securities by Depositor ............ 24
Section 5.11 Definitive Preferred Trust Securities Certificates ............ 25
Section 5.12 Book-Entry System ............................................. 25
Section 5.13 Rights of Securityholders ..................................... 26
Section 5.14 Cancellation by Transfer Agent and Registrar .................. 26
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01 Limitations on Voting Rights .................................. 26
Section 6.02 Notice of Meetings ............................................ 27
Section 6.03 Meetings of Holders of Preferred Trust Securities ............. 28
Section 6.04 Voting Rights ................................................. 28
Section 6.05 Proxies, etc .................................................. 28
Section 6.06 Securityholder Action by Written Consent ...................... 28
Section 6.07 Record Date for Voting and Other Purposes ..................... 29
Section 6.08 Acts of Securityholders ....................................... 29
Section 6.09 Inspection of Records ......................................... 30
ARTICLE VII
Representations and Warranties of the Property
Trustee and the Delaware Trustee
Section 7.01 Property Trustee .............................................. 30
Section 7.02 Delaware Trustee .............................................. 31
ARTICLE VIII
The Trustees
Section 8.01 Certain Duties and Responsibilities ........................... 31
Section 8.02 Notice of Defaults ............................................ 33
Section 8.03 Certain Rights of Property Trustee ............................ 33
Section 8.04 Not Responsible for Recitals or Issuance of Securities ........ 36
Section 8.05 May Hold Securities ........................................... 36
Section 8.06 Compensation; Fees; Indemnity ................................. 36
Section 8.07 Certain Trustees Required; Eligibility ........................ 37
Section 8.08 Conflicting Interests ......................................... 37
Section 8.09 Co-Trustees and Separate Trustee .............................. 38
Section 8.10 Resignation and Removal; Appointment of Successor ............. 39
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Section 8.11 Acceptance of Appointment by Successor ........................ 40
Section 8.12 Merger, Conversion, Consolidation or Succession to Business ... 41
Section 8.13 Preferential Collection of Claims Against Depositor or Trust .. 41
Section 8.14 Reports by Property Trustee ................................... 41
Section 8.15 Reports to the Property Trustee ............................... 42
Section 8.16 Evidence of Compliance With Conditions Precedent .............. 42
Section 8.17 Number of Trustees ............................................ 42
Section 8.18 Delegation of Power ........................................... 43
Section 8.19 Fiduciary Duty ................................................ 43
ARTICLE IX
Termination and Liquidation
Section 9.01 Dissolution Upon Expiration Date .............................. 44
Section 9.02 Early Termination ............................................. 44
Section 9.03 Termination ................................................... 45
Section 9.04 Liquidation ................................................... 45
ARTICLE X
Miscellaneous Provisions
Section 10.01 Guarantee by the Depositor and Assumption of Obligations ..... 47
Section 10.02 Limitation of Rights of Securityholders ...................... 47
Section 10.03 Amendment .................................................... 47
Section 10.04 Separability ................................................. 48
Section 10.05 Governing Law ................................................ 48
Section 10.06 Successors ................................................... 49
Section 10.07 Headings ..................................................... 49
Section 10.08 Notice and Demand ............................................ 49
Section 10.09 Agreement Not to Petition .................................... 49
Section 10.10. Conflict with Trust Indenture Act ............................ 50
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of ______, ____,
between (i) TXU Gas Company, a Texas corporation (the "Depositor"), (ii) The
Bank of New York, a banking corporation duly organized and existing under the
laws of New York, as trustee (the "Property Trustee" and, in its separate
capacity and not in its capacity as Property Trustee, the "Bank"), (iii) The
Bank of New York (Delaware), a banking corporation duly organized under the laws
of Delaware, as Delaware trustee (the "Delaware Trustee"), (iv)
_________________, ___________, __________ and _____ ________, each an
individual, and each of whose address is c/o TXU Business Services Company, 1601
Bryan Street, Dallas, Texas 75201 (each, an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees are referred to herein each as a
"Trustee" and collectively as the "Trustees") and (v) the several Holders, as
hereinafter defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee and
______________, as Administrative Trustee, have heretofore duly declared and
established a business trust pursuant to the Delaware Business Trust Act by the
entering into of that certain Trust Agreement, dated as of ______________, ____
(the "Original Trust Agreement"), and by the execution by the Property Trustee,
the Delaware Trustee and ____________, as Administrative Trustee and filing with
the Secretary of State of the State of Delaware of the Certificate of Trust,
dated ___________, ____, a copy of which is attached as Exhibit A; and
WHEREAS, the Trust and the Depositor entered into an Underwriting
Agreement dated _______, ____ with ___________________________________________.
WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the acquisition by the Trust from the Depositor of all of the right,
title and interest in the Debentures, (ii) the issuance of the Common Trust
Securities, as hereinafter defined, by the Trust to the Depositor, and (iii) the
issuance of the Preferred Trust Securities, as hereinafter defined, by the
Trust.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other party and
for the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
<PAGE>
ARTICLE I
DEFINED TERMS
SECTION 1.01. DEFINITIONS. For all purposes of this Trust Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the
case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Trust Agreement as a whole and not to
any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount for a given period, the amount of Additional Interest (as
defined in the Subordinated Indenture) paid by the Debenture Issuer on a Like
Amount of Debentures for such period.
"Administrative Trustee" means each of the individuals identified as
an "Administrative Trustee" in the preamble to this Trust Agreement solely in
their capacities as Administrative Trustees of the Trust and not in their
individual capacities, or such trustee's successor in interest in such capacity,
or any successor trustee appointed as herein provided.
"Adverse Tax Consequence" means any of the circumstances described in
clauses (i), (ii) and (iii) of the definition of "Tax Event" herein.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
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"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having jurisdiction
in the premises judging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjudication or composition of or in respect of such
Person under Federal bankruptcy law or any other applicable Federal or
State law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Person or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under Federal bankruptcy law or any other applicable Federal
or State law, or the consent by it to the filing of such petition or
to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or 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.
"Bankruptcy Laws" has the meaning specified in Section 10.09.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a duly authorized committee thereof and
to be in full force and effect on the date of such certification, and delivered
to the appropriate Trustee.
"Business Day" means a day other than (x) a Saturday or a Sunday, (y)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (z) a day on which the Property Trustee's
Corporate Trust Office or the Debenture Trustee's principal corporate trust
office is closed for business.
"Certificate of Trust" has the meaning specified in Section 2.07(d).
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"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Trust Security" means a security representing an undivided
beneficial interest in the assets of the Trust having a Liquidation Amount of
$_____ and having the rights provided therefor in this Trust Agreement,
including the right to receive Distributions, Debentures and a Liquidation
Distribution as provided herein.
"Common Trust Securities Certificate" means a certificate evidencing
ownership of Common Trust Securities, substantially in the form attached as
Exhibit B.
"Corporate Trust Office" means the principal corporate trust office of
the Property Trustee located in New York, New York which at the date of
execution of this Trust Agreement is located at 101 Barclay Street - 21W, New
York, New York 10286.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or the Trust's
Affiliates; and (b) any Holder of Trust Securities.
"Debenture Event of Default" means an "Event of Default" as defined in
the Subordinated Indenture.
"Debenture Issuer" means TXU Gas Company, a Texas corporation, in its
capacity as issuer of the Debentures and its Successors.
"Debenture Redemption Date" means "Redemption Date" as defined in the
Subordinated Indenture with respect to the Debentures.
"Debenture Trustee" means The Bank of New York, as trustee under the
Subordinated Indenture, and its permitted successors and assigns as such
trustee.
"Debentures" means $___________ aggregate principal amount of the
Debenture Issuer's __% Junior Subordinated Debentures, Series _, issued pursuant
to the Subordinated Indenture which will mature on ______, ____.
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"Definitive Preferred Trust Securities Certificates" means Preferred
Trust Securities Certificates issued in certificated, fully registered form as
provided in Section 5.11.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time.
"Delaware Trustee" means the banking corporation identified as the
"Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor trustee appointed
as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement and includes TXU Gas Company in its capacity as Holder of the Common
Trust Securities and its Successors.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section 9.02.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Trust in the payment of any Redemption
Price, plus accumulated and unpaid Distributions, of any Trust
Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in whose
performance or breach is specifically dealt with in clause (ii) or
(iii), above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or certified
mail, to the Trust by the Holders of at least 10% in Liquidation
Amount of the Outstanding Preferred Trust Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
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(v) the occurrence of a Bankruptcy Event with respect to the
Trust.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit C, as amended from time to time.
"Expiration Date" shall have the meaning specified in Section 9.01.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and The Bank of New York, a New York banking corporation, as
trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Holders of the Preferred Trust Securities, as
amended from time to time.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee,
or any officer, director, shareholder, member, partners, employee,
representative or agent of any Trustee, or any employee or agent of the Trust or
its Affiliates.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having a Liquidation Amount
equal to the principal amount of Debentures to be contemporaneously redeemed in
accordance with the Subordinated Indenture and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities plus accumulated and
unpaid Distributions to the date of such payment and (ii) Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
Holders to which such Debentures are distributed.
"Liquidation Amount" means the stated amount of $_____ per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a dissolution and
liquidation of the Trust pursuant to Section 9.04.
"Liquidation Distribution" has the meaning specified in Section
9.04(e).
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"Offer" has the meaning specified in Section 2.07(c).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. One of
the officers signing an Officers' Certificate given pursuant to Section 8.16
shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee, the Delaware Trustee or the
Depositor, but not an employee of the Trust, the Property Trustee, the Delaware
Trustee or the Depositor, and who shall be reasonably acceptable to the Property
Trustee. Any Opinion of Counsel delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include
statements comparable to the statements referred to in the definition of
"Officers' Certificate" herein.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Outstanding," when used with respect to Preferred Trust Securities,
means, as of the date of determination, all Preferred Trust Securities
theretofore delivered under this Trust Agreement, except:
(i) Preferred Trust Securities theretofore canceled by the
Transfer Agent and Registrar or delivered to the Transfer Agent and
Registrar for cancellation;
(ii) Preferred Trust Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the Holders of such Preferred
Trust Securities; provided that, if such Preferred Trust Securities
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are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(iii) Preferred Trust Securities in exchange for or in lieu of
which other Preferred Trust Securities have been delivered pursuant to
this Trust Agreement, including pursuant to Sections 5.04, 5.05 or
5.11;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Trust Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Trust Securities owned by the Depositor, any Trustee or any Affiliate
of the Depositor or any Trustee shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Preferred Trust Securities which such Trustee
knows to be so owned shall be so disregarded and (b) the foregoing shall not
apply at any time when all of the Outstanding Preferred Trust Securities are
owned by the Depositor, one or more of the Trustees and/or any such Affiliate.
Preferred Trust Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustee the pledgee's right so to act with respect to such
Preferred Trust Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Trust
Securities Certificate as reflected in the records of the Securities Depository
or, if a Securities Depository participant is not the beneficial owner, then as
reflected in the records of a Person maintaining an account with such Securities
Depository (directly or indirectly), in accordance with the rules of such
Securities Depository.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.09 and shall initially be _____________________.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with _______________________,
or such other banking institution as the Depositor shall select for the benefit
of the Securityholders in which all amounts paid in respect of the Debentures
will be held and from which the Paying Agent, pursuant to Section 5.09, shall
make payments to the Securityholders in accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Trust Security" means a security representing an undivided
beneficial interest in the assets of the Trust having a Liquidation Amount of
$_____ and having rights provided therefor in this Trust Agreement, including
the right to receive Distributions, Debentures and a Liquidation Distribution as
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provided herein and, in certain circumstances, a preference over the Common
Trust Securities.
"Preferred Trust Securities Certificate" means a certificate
evidencing ownership of Preferred Trust Securities, substantially in the form
attached as Exhibit D.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date shall be a Redemption
Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for
redemption of any Trust Security, the Liquidation Amount of such Trust Security.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Responsible Officer," when used with respect to the Property Trustee
means an officer of the Property Trustee assigned by the Property Trustee to
administer its corporate trust matters.
"Securities Depository" shall have the meaning specified in Section
5.12. The Depository Trust Company will be the initial Securities Depository.
"Securities Register" shall mean the Securities Register as described
in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
shall be a beneficial owner of such security within the meaning of the Delaware
Business Trust Act.
"Subordinated Indenture" means the Indenture, dated as of June 1,
1998, between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.
"Tax Event" means the receipt by the Trust or the Depositor of an
opinion of counsel experienced in such matters to the effect that, as a result
of (a) any amendment to, clarification of, or change (including any announced
prospective change) in, the laws or treaties (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any judicial decision or any official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement (including any notice or announcement of intent to issue or adopt
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any such administrative pronouncement, ruling, regulatory procedure or
regulation) (each, an "Administrative Action"), or (c) any amendment to,
clarification of, or change in the official position or the interpretation of
any such Administrative Action or judicial decision or any interpretation or
pronouncement that provides for a position with respect to such Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case by any legislative body, court, governmental authority or
regulatory body, irrespective of the time or manner in which such amendment,
clarification or change is introduced or made known, which amendment,
clarification, or change is effective, which Administrative Action is taken or
which judicial decision is issued, in each case on or after the date of issuance
of the Preferred Trust Securities, there is more than an insubstantial risk that
(i) the Trust is, or will be, subject to United States federal income tax with
respect to interest received on the Debentures, (ii) interest payable by the
Depositor on the Debentures is not, or will not be, fully deductible by the
Depositor for United States federal income tax purposes, or (iii) the Trust is,
or will be, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Transfer Agent and Registrar" shall mean the transfer agent and
registrar for the Preferred Trust Securities appointed by the Trust and shall be
initially Texas Business Services Company.
"Trust" means the Delaware business trust created by the Original
Trust Agreement and the Certificate of Trust and continued hereby and identified
on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Amended and Restated Trust Agreement and any such modification,
amendment or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Amended and Restated Trust Agreement and
any such modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as amended
and in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit
in, or owing to, the Payment Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Securities Certificate" means any one of the Common Trust
Securities Certificates or the Preferred Trust Securities Certificates.
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"Trust Security" means any one of the Common Trust Securities or the
Preferred Trust Securities.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
_______, ____, among the Trust, the Depositor and the underwriters named
therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.01. NAME. The Trust continued hereby shall be known as
"[Name of Trust]", in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.
SECTION 2.02. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS. The office of the Delaware Trustee in the State of Delaware is White
Clay Center, Route 273, Newark, Delaware 19711, or at such other address in
Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal place of business of the Trust
is c/o TXU Gas Company, Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201.
SECTION 2.03. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES. The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
SECTION 2.04. ISSUANCE OF THE PREFERRED TRUST SECURITIES. On _______,
____, an authorized representative of the Depositor and the Trust, both executed
and delivered the Underwriting Agreement. Contemporaneously with the execution
and delivery of this Trust Agreement, one of the Administrative Trustees, on
behalf of the Trust in accordance with Section 5.02, executed and delivered a
Preferred Trust Securities Certificate, registered in the name of the nominee of
The Depository Trust Company, having an aggregate Liquidation Amount of
$___________.
SECTION 2.05. SUBSCRIPTION AND PURCHASE OF DEBENTURES; ISSUANCE OF THE
COMMON TRUST SECURITIES. Contemporaneously with the execution and delivery of
this Trust Agreement, the Administrative Trustees, on behalf of the Trust,
subscribed to and purchased from the Debenture Issuer Debentures, registered in
the name of the Property Trustee and having an aggregate principal amount equal
to $___________ and, in satisfaction of the purchase price for such Debentures,
(x) one of the Administrative Trustees, on behalf of the Trust, executed and
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delivered to the Depositor Common Trust Securities Certificates, registered in
the name of the Depositor, representing _____ Common Trust Securities having an
aggregate Liquidation Amount of $_________, and (y) the Property Trustee, on
behalf of the Trust, delivered to the Debenture Issuer the sum of $___________
representing the proceeds from the sale of the Preferred Trust Securities
pursuant to the Underwriting Agreement.
SECTION 2.06. DECLARATION OF TRUST; APPOINTMENT OF ADDITIONAL
ADMINISTRATIVE TRUSTEES. The exclusive purposes and functions of the Trust are
(i) to issue Trust Securities and invest the proceeds thereof in Debentures, and
(ii) to engage in those activities necessary or incidental thereto. The
Depositor hereby appoints the Trustees as trustees of the Trust, to have all the
rights, powers and duties to the extent set forth herein. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Securityholders. The
Trustees shall have all rights, powers and duties set forth herein and in
accordance with applicable law with respect to accomplishing the purposes of the
Trust. Anything in this Trust Agreement to the contrary notwithstanding, the
Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Property
Trustee or the Administrative Trustees set forth herein. The Delaware Trustee
shall be one of the Trustees of the Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business Trust Act.
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS. (a)
The Trustees shall conduct the affairs of the Trust in accordance with the terms
of this Trust Agreement. Subject to the limitations set forth in paragraph (b)
of this Section and Article VIII and in accordance with the following provisions
(A) and (B), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees, acting singly
or together, shall have the power, duty and authority to act on behalf of the
Trust with respect to the following matters:
(i) the issuance and sale of the Trust Securities;
(ii) without the consent of any Person, to cause the Trust to
enter into and to execute, deliver and perform on behalf of the Trust,
the Expense Agreement, and such other agreements as may be necessary
or desirable in connection with the consummation of the Underwriting
Agreement;
(iii) to qualify the Trust to do business in any jurisdiction as
may be necessary or desirable;
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(iv) the collection of interest, principal and any other payments
made in respect of the Debentures;
(v) the registration of the Preferred Trust Securities under the
Securities Act of 1933, as amended, and under state securities or blue
sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(vi) the listing of the Preferred Trust Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Trust Securities under
the Exchange Act, and the preparation and filing of all periodic and
other reports and other documents pursuant to the foregoing;
(vii) the appointment of a Paying Agent and Transfer Agent and
Registrar in accordance with this Trust Agreement;
(viii) registering transfers of the Trust Securities in
accordance with this Trust Agreement;
(ix) the establishment of a record date for any of the purposes
contemplated by Section 6.07 hereof;
(x) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of Delaware; and
(xi) the taking of any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary
or advisable to protect and conserve the Trust Property for the
benefit of the Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the following
ministerial matters:
(i) the establishment of the Payment Account;
(ii) the receipt of the Debentures;
(iii) the deposit of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(iv) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities in accordance with the terms of this
Trust Agreement;
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(v) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with the terms of this Trust Agreement;
(vi) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
(vii) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the execution of
the certificate of cancellation to be prepared and filed by the
Administrative Trustees with the Secretary of State of the State of
Delaware; and
(viii) the taking of any ministerial action incidental to the
foregoing as the Property Trustee may from time to time determine is
necessary or advisable to protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder).
Subject to this Section 2.07(a)(B), the Property Trustee shall have
none of the duties, powers or authority of the Administrative Trustees set forth
in Sections 2.07(a)(A) and 2.07(c) or the Depositor set forth in Section
2.07(c). The Property Trustee shall have the power and authority to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Subordinated Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee may, for the benefit of Holders of the Trust Securities, in its
discretion, proceed to protect and enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of this
Trust Agreement.
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the
Trust Property or interests therein, including to Securityholders, except as
expressly provided herein, (iii) take any action that would cause the Trust to
fail or cease to qualify as a "grantor trust" for United States federal income
tax purposes and not as an association taxable as a corporation, (iv) incur any
indebtedness for borrowed money or (v) take or consent to any action that would
result in the placement of a Lien on any of the Trust Property. The Trustees
shall defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue of the Preferred Trust Securities,
the Depositor and the Administrative Trustees, acting singly or together, (and,
in the case of (iii) and (v) below, Robert J. Reger, Jr., as authorized
representative of the Trust) shall have the right and responsibility to assist
the Trust with respect to, or effect on behalf of the Trust, the following (and
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any actions taken by the Depositor in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the Commission and to
execute a registration statement on Form S-3 in relation to the
Preferred Trust Securities, including any amendments thereto;
(ii) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred Trust
Securities and to do any and all such acts, other than actions which
must be taken by or on behalf of the Trust, and advise the Trustees of
actions they must take on behalf of the Trust, and prepare for
execution and filing any documents to be executed and filed by the
Trust or on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(iii) to execute and deliver on behalf of the Trust the
Underwriting Agreement and such other agreements as may be necessary
or desirable in connection with the consummation thereof;
(iv) to select the investment banker or bankers to act as
underwriters with respect to the offer and sale by the Trust of
Preferred Trust Securities ("Offer") and negotiate the terms of an
Underwriting Agreement and pricing agreement providing for the Offer;
and
(v) to take any other actions necessary or desirable to carry out
any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
or classified other than as a "grantor trust" for United States federal income
tax purposes and not as an association taxable as a corporation and so that the
Debentures will be treated as indebtedness of the Debenture Issuer for United
States federal income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust filed with the Secretary of State of
the State of Delaware with respect to the Trust (as amended or restated from
time to time, the "Certificate of Trust") or this Trust Agreement, that each of
the Depositor and the Administrative Trustees determines in its discretion to be
necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the Holders of the Preferred Trust
Securities.
SECTION 2.08. ASSETS OF TRUST. The assets of the Trust shall consist
of the Trust Property.
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SECTION 2.09. TITLE TO TRUST PROPERTY. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and administered by the Property Trustee for the
benefit of the Securityholders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.01. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and the Paying Agent
appointed by the Administrative Trustees shall have exclusive control and sole
right of withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in accordance with
this Trust Agreement. All monies and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Holders of Trust Securities and
for distribution as herein provided, including (and subject to) any priority of
payments provided for herein. The Property Trustee shall have no liability in
any respect whatsoever in regards to any moneys or other property deposited in
the Payment Account at an institution other than the Property Trustee.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from the Closing Date, and,
except in the event that the Depositor exercises its right to extend the
interest payment period for the Debentures pursuant to Section 311 of the
Subordinated Indenture, shall be payable quarterly in arrears on _________ 1,
_________ 1, __________ 1, and __________ 1 of each year, commencing on _______
1, ____. If any date on which Distributions are otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution shall 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) in each case, with the
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same force and effect as if made on such date (each date on which Distributions
are payable in accordance with this Section 4.01(a) a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed at a
rate of __% per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any quarterly period shall be computed on
the same basis as interest is calculated on the Debentures. If the interest
payment period for the Debentures is extended pursuant to Section 311 of the
Subordinated Indenture, then Distributions on the Trust Securities will be
deferred for the period equal to the extension of the interest payment period
for the Debentures and the rate per annum at which Distributions on the Trust
Securities accumulate shall be increased by an amount such that the aggregate
amount of Distributions that accumulate on all Trust Securities during any such
extended interest payment period is equal to the aggregate amount of interest
(including, to the extent permitted by law, interest payable on unpaid interest
at the percentage rate per annum set forth above, compounded quarterly) that
accrues during any such extended interest payment period on the Debentures. The
amount of Distributions payable for any period shall include the Additional
Amounts, if any.
(c) Distributions on the Trust Securities shall be made and shall be
deemed payable on each Distribution Date only to the extent that the Trust has
funds available in the Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be one Business Day prior to the relevant Distribution Date, if Trust
Securities are in book-entry only form, and 15 days prior to the relevant
Distribution Date if Trust Securities are not in book-entry only form.
SECTION 4.02. REDEMPTION. (a) On each Debenture Redemption Date and at
the maturity date ("Maturity Date") for the Debentures (as defined in the
Subordinated Indenture), the Property Trustee will be required to redeem a Like
Amount of Trust Securities at the Redemption Price plus accumulated and unpaid
Distributions to the Redemption Date or Maturity Date, as the case may be.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption or liquidation shall state:
(i) the Redemption Date;
(ii) the Redemption Price and the amount of accumulated and
unpaid Distributions to be paid on the Redemption Date;
(iii) the CUSIP number;
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(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price plus
accumulated and unpaid Distributions to the Redemption Date will
become due and payable upon each such Trust Security to be redeemed
and that Distributions thereon will cease to accrue on and after said
date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price plus accumulated and unpaid Distributions to
the Redemption Date with the proceeds from the contemporaneous redemption of
Debentures. Redemptions of the Trust Securities shall be made and the Redemption
Price plus accumulated and unpaid Distributions to the Redemption Date shall be
deemed payable on each Redemption Date only to the extent that the Trust has
funds immediately available in the Payment Account for such payment.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Trust Securities, then, by 12:00 noon, New York time, on the
Redemption Date, subject to Section 4.02(c), the Property Trustee shall
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price plus accumulated and unpaid Distributions to the Redemption
Date and will give the Paying Agent irrevocable instructions and authority to
pay the Redemption Price plus accumulated and unpaid Distributions to the
Redemption Date to the Holders thereof upon surrender of their Preferred Trust
Securities Certificates and Common Trust Securities Certificates.
Notwithstanding the foregoing, Distributions on the Trust Securities with
respect to Distribution Dates occurring on or prior to the Redemption Date for
any Trust Securities called for redemption shall be payable to the Holders of
such Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
on the Redemption Date, all rights of Securityholders holding Trust Securities
so called for redemption will cease, except the right of such Securityholders to
receive the Redemption Price plus accumulated and unpaid Distributions to the
Redemption Date thereof, but without interest thereon, and such Trust Securities
will cease to be Outstanding. In the event that any Redemption Date is not a
Business Day, then payment of the Redemption Price payable on such date plus
accumulated and unpaid Distributions to such Redemption Date shall 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 such date. In the event that payment of the Redemption Price plus
accumulated and unpaid Distributions in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities to
the date such Redemption Price plus accumulated and unpaid Distributions is
actually paid, in which case the actual payment date will be deemed the date
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fixed for redemption for purposes of calculating the Redemption Price plus
accumulated and unpaid Distributions to such date.
(e) Payment of the Redemption Price on the Trust Securities shall be
made to the Holders thereof as they appear on the Securities Register for the
Trust Securities on the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated to the Common Trust Securities and
to the Preferred Trust Securities in the proportion that the aggregate
Liquidation Amount of each is to the aggregate Liquidation Amount of all
outstanding Trust Securities. The particular Preferred Trust Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Property Trustee from the Outstanding Preferred Trust Securities not
previously called for redemption, by such method as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $_____ or integral multiples thereof) of the Liquidation
Amount of Preferred Trust Securities of a denomination larger than $_____. The
Property Trustee shall promptly notify the Transfer Agent and Registrar in
writing of the Preferred Trust Securities selected for redemption and, in the
case of any Preferred Trust Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of Preferred Trust Securities shall relate, in the case of any
Preferred Trust Securities redeemed or to be redeemed only in part, to the
portion of the Liquidation Amount of Preferred Trust Securities which has been
or is to be redeemed.
SECTION 4.03. SUBORDINATION OF COMMON TRUST SECURITIES. (a) Payment of
Distributions (including Additional Amounts, if applicable) on, and the
Redemption Price plus accumulated and unpaid Distributions of, the Trust
Securities, as applicable, shall be made pro rata based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any Distribution
Date or Redemption Date an Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price plus accumulated and unpaid Distributions
of, any Common Trust Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Trust Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on all Outstanding
Preferred Trust Securities for all distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price plus accumulated and
unpaid Distributions the full amount of such Redemption Price plus accumulated
and unpaid Distributions on all Outstanding Preferred Trust Securities, shall
have been made or provided for, and all funds immediately available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or Redemption
Price plus accumulated and unpaid Distributions of, Preferred Trust Securities
then due and payable.
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(b) In the case of the occurrence of any Event of Default resulting
from a Debenture Event of Default, the Holder of Common Trust Securities will be
deemed to have waived any such Event of Default under this Trust Agreement until
the effect of all such Events of Default with respect to the Preferred Trust
Securities have been cured, waived or otherwise eliminated. Until all such
Events of Default under this Trust Agreement with respect to the Preferred Trust
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Preferred Trust
Securities and not the Holder of the Common Trust Securities, and only the
Holders of the Preferred Trust Securities will have the right to direct the
Property Trustee to act on their behalf.
SECTION 4.04. PAYMENT PROCEDURES. Payments in respect of the Preferred
Trust Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Securities Register or, if
the Preferred Trust Securities are held by a Securities Depository, such
Distributions shall be made to the Securities Depository, which shall credit the
relevant Persons' accounts at such Securities Depository on the applicable
Distribution Dates. Payments in respect of the Common Trust Securities shall be
made in such manner as shall be mutually agreed between the Administrative
Trustees and the Holder of the Common Trust Securities.
SECTION 4.05. TAX RETURNS AND REPORTS. The Administrative Trustees
shall prepare (or cause to be prepared), at the Depositor's expense and
direction, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared or filed) the Internal Revenue Service Form 1041 (or
any successor form) required to be filed in respect of the Trust in each taxable
year of the Trust and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the related Internal Revenue Service Form
1099, or any successor form or the information required to be provided on such
form. The Administrative Trustees shall provide the Depositor and the Property
Trustee with a copy of all such returns, reports and schedules promptly after
such filing or furnishing. The Trustees shall comply with United States federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.
SECTION 4.06. PAYMENTS UNDER INDENTURE. Any amount payable
hereunder to any Holder of Preferred Trust Securities shall be reduced by the
amount of any corresponding payment such Holder has directly received pursuant
to Section 808 of the Subordinated Indenture. Notwithstanding the provisions
hereunder to the contrary, Securityholders acknowledge that any Holder of
Preferred Trust Securities that receives payment under Section 808 of the
Subordinated Indenture may receive amounts greater than the amount such Holder
may be entitled to receive pursuant to the other provisions of this Trust
Agreement.
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ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.01. INITIAL OWNERSHIP. Upon the creation of the Trust by the
contribution by the Depositor pursuant to Section 2.03 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
SECTION 5.02. THE TRUST SECURITIES CERTIFICATES. The Trust Securities
Certificates shall be issued in denominations of $_____ Liquidation Amount and
integral multiples thereof. The Trust Securities Certificates shall be executed
on behalf of the Trust by manual or facsimile signature of at least one
Administrative Trustee and, if executed on behalf of the Trust by facsimile
signature, the Preferred Trust Securities shall be countersigned by the Transfer
Agent and Registrar or its agent. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust and, if
executed on behalf of the Trust by facsimile signature, countersigned by the
Transfer Agent and Registrar or its agent, shall be validly issued and entitled
to the benefits of this Trust Agreement, notwithstanding that such individuals
or any of them shall have ceased to be so authorized prior to the delivery of
such Trust Securities Certificates or did not hold such offices at the date of
delivery of such Trust Securities Certificates. A transferee of a Trust
Securities Certificate shall become a Securityholder, and shall be entitled to
the rights and subject to the obligations of a Securityholder hereunder, upon
due registration of such Trust Securities Certificate in such transferee's name
pursuant to Section 5.04 or 5.12.
SECTION 5.03. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
On the Closing Date, the Administrative Trustees, or any one of them, shall
cause Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 2.04 and 2.05, to be executed on behalf of the Trust, and
in the case of Preferred Trust Securities executed by facsimile signature,
countersigned by the Transfer Agent and Registrar, or its agent, and delivered
to or upon the written order of the Depositor signed by its chairman of the
board, any of its vice presidents or its treasurer, without further corporate
action by the Depositor, in authorized denominations. The Depositor agrees to
indemnify, defend and hold The Bank of New York harmless against any and all
costs and liabilities incurred without negligence arising out of or in
connection with any such countersigning by it.
SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
SECURITIES CERTIFICATES. The Transfer Agent and Registrar shall keep or cause to
be kept, at the office or agency maintained pursuant to Section 5.08, a
Securities Register in which, subject to such reasonable regulations as it may
prescribe, the Transfer Agent and Registrar shall provide for the registration
of Preferred Trust Securities Certificates and the Common Trust Securities
Certificates (subject to Section 5.10 in the case of the Common Trust Securities
Certificates) and registration of transfers and exchanges of Preferred Trust
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Securities Certificates as herein provided. TXU Business Services Company shall
be the initial Transfer Agent and Registrar.
Upon surrender for registration of transfer of any Preferred Trust
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustees, or any one of them, shall execute on behalf
of the Trust by manual or facsimile signature and, if executed on behalf of the
Trust by facsimile signature, cause the Transfer Agent and Registrar or its
agent to countersign and deliver, in the name of the designated transferee or
transferees, one or more new Preferred Trust Securities Certificates in
authorized denominations of a like aggregate Liquidation Amount. At the option
of a Holder, Preferred Trust Securities Certificates may be exchanged for other
Preferred Trust Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of the Preferred
Trust Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 5.08.
Every Preferred Trust Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and
the Transfer Agent and Registrar duly executed by the Holder or such Holder's
attorney duly authorized in writing. Each Preferred Trust Securities Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently disposed of by the Administrative Trustees in accordance with
customary practice. The Trust shall not be required to (i) issue, register the
transfer of, or exchange any Preferred Trust Securities during a period
beginning at the opening of business 15 calendar days before the day of mailing
of a notice of redemption of any Preferred Trust Securities called for
redemption and ending at the close of business on the day of such mailing or
(ii) register the transfer of or exchange any Preferred Trust Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Trust Securities being redeemed in part.
No service charge shall be made for any registration of transfer or
exchange of Preferred Trust Securities Certificates, but the Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Preferred Trust Securities Certificates.
SECTION 5.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Transfer Agent and Registrar, or if the Transfer Agent and
Registrar shall receive evidence to its satisfaction of the destruction, loss or
theft of any Trust Securities Certificate and (b) there shall be delivered to
the Transfer Agent and Registrar and the Administrative Trustees such security
or indemnity as may be required by them to save each of them and the Depositor
harmless, then in the absence of notice that such Trust Securities Certificate
shall have been acquired by a bona fide purchaser, the Administrative Trustees,
or any one of them, on behalf of the Trust shall execute by manual or facsimile
signature and, if execution on behalf of the Trust is by facsimile signature,
countersigned by a Transfer Agent and Registrar or its agent; and the
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Administrative Trustees, or any one of them, and, if executed on behalf of the
Trust by facsimile signature, countersigned by the Transfer Agent and Registrar
or its agent shall make available for delivery, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Transfer Agent and Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Trust
Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due
presentation of a Trust Securities Certificate for registration of transfer, the
Trustees and the Transfer Agent and Registrar, and any agent of the Trustee and
the Transfer Agent and Registrar, shall be entitled to treat the Person in whose
name any Trust Securities Certificate shall be registered in the Securities
Register as the owner of such Trust Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Transfer Agent and Registrar shall be bound by any notice to
the contrary.
SECTION 5.07. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
The Administrative Trustees shall furnish or cause to be furnished (x) to the
Depositor, within 15 days after receipt by any Administrative Trustee of a
request therefor from the Depositor in writing and (y) to the Property Trustee,
promptly after receipt by any Administrative Trustee of a request therefor from
the Property Trustee in writing in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, a list, in such form as
the Depositor or the Property Trustee may reasonably require, of the names and
addresses of the Securityholders as of a recent date. If Holders of Trust
Securities Certificates evidencing ownership at such time and for the previous
six months not less than 25% of the Outstanding aggregate Liquidation Amount
apply in writing to any Administrative Trustee, and such application states that
the applicants desire to communicate with other Securityholders with respect to
their rights under this Trust Agreement or under the Trust Securities
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Administrative Trustees
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Securityholders. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold either the Depositor or
any Trustees accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 5.08. MAINTENANCE OF OFFICE OR AGENCY. The Depositor shall or
shall cause the Transfer Agent and Registrar to maintain in the Borough of
Manhattan, The City of New York, an office or offices or agency or agencies
where Preferred Trust Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Depositor, the Trust or the Transfer Agent and Registrar in respect of the
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Trust Securities and the Trust Agreement may be served. The Depositor initially
designates Midwest Clearing Corporation, 40 Broad Street, New York, New York
10004 as its principal office for such purposes. The Depositor shall or shall
cause the Transfer Agent and Registrar to give prompt written notice to the
Depositor, the Property Trustee and to the Securityholders of any change in the
location of the Securities Register or any such office or agency. If at any time
the Depositor shall fail to maintain such office or agency or shall fail to
furnish the Property Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Property Trustee, and the Depositor hereby appoints the Property
Trustee its agent and the agent of the Trust to receive all such presentations,
surrenders, notices and demands.
SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying Agent
shall make distributions to Securityholders from the Payment Account and shall
report the amounts of such distributions to the Administrative Trustees and the
Property Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Payment Account for the purpose of making the Distributions
referred to above. The Property Trustee shall be entitled to rely upon a
certificate of the Paying Agent stating in effect the amount of such funds so to
be withdrawn and that same are to be applied by the Paying Agent in accordance
with this Section 5.09. The Administrative Trustees or any one of them may
revoke such power and remove the Paying Agent if the Administrative Trustee or
any one of them determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Trust Agreement in any
material respect. The Paying Agent shall initially be ____________________, and
it may choose any co-paying agent that is acceptable to the Administrative
Trustees and the Depositor. The Paying Agent shall be permitted to resign upon
30 days' written notice to the Administrative Trustees and the Depositor. In the
event of the removal or resignation of ______________________ as Paying Agent,
the Administrative Trustees shall appoint a successor that is reasonably
acceptable to the Property Trustee and the Depositor to act as Paying Agent
(which shall be a bank, trust company or an Affiliate of the Depositor). The
Administrative Trustees shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrative Trustees to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon resignation or removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Paying Agent
appointed hereunder, and the Paying Agent shall be bound by the requirements
with respect to paying agents of securities issued pursuant to the Trust
Indenture Act. Any reference in this Trust Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
SECTION 5.10. OWNERSHIP OF COMMON TRUST SECURITIES BY DEPOSITOR. On
the Closing Date, the Depositor shall acquire, and thereafter retain, beneficial
and record ownership of the Common Trust Securities. Except in connection with a
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transaction involving the Depositor that would be permitted under Article Eleven
of the Subordinated Indenture, any attempted transfer of the Common Trust
Securities shall be void. The Administrative Trustees shall cause each Common
Trust Securities Certificate issued to the Depositor to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST
AGREEMENT". Common Trust Securities Certificates representing the Common Trust
Securities shall be issued to the Depositor in the form of a typewritten or
definitive Common Trust Securities Certificate.
SECTION 5.11. DEFINITIVE PREFERRED TRUST SECURITIES CERTIFICATES. Upon
initial issuance of the Preferred Trust Securities, the Definitive Preferred
Trust Securities Certificates shall be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees, or any one of them. The Administrative Trustees, or any
one of them, shall execute on behalf of the Trust by manual or facsimile
signature, and, if executed by facsimile on behalf of the Trust, countersigned
by the Transfer Agent and Registrar or its agent, the Definitive Preferred Trust
Securities Certificates initially in accordance with the instructions of the
Depositor. Neither the Transfer Agent and Registrar nor any of the
Administrative Trustees shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.
SECTION 5.12. BOOK-ENTRY SYSTEM. Some or all of the Preferred
Trust Securities may be registered in the name of a securities depository
("Securities Depository") or a nominee therefor, and held in the custody of the
Securities Depository or a custodian thereof. In such event, a single
certificate will be issued and delivered to the Securities Depository for such
Preferred Trust Securities, in which case the Owners of such Preferred Trust
Securities will not receive physical delivery of certificates for Preferred
Trust Securities. Except as provided herein, all transfers of beneficial
ownership interests in such Preferred Trust Securities will be made by
book-entry only, and no investor or other party purchasing, selling or otherwise
transferring beneficial ownership of the Preferred Trust Securities will
receive, hold or deliver any certificate for Preferred Trust Securities. The
Depositor, the Trustees and the Paying Agent will recognize the Securities
Depository or its nominee as the Holder of Preferred Trust Securities for all
purposes, including notices and voting.
The Administrative Trustees, at the direction and expense of the
Depositor, may from time to time appoint a Securities Depository or a successor
thereto and enter into a letter of representations or other agreement with such
Securities Depository to establish procedures with respect to the Preferred
Trust Securities. Any Securities Depository shall be a Clearing Agency.
The Depositor and the Trustees covenant and agree to meet the
requirements of a Securities Depository for the Preferred Trust Securities with
respect to required notices and other provisions of the letter of
representations or agreement executed with respect to such Preferred Trust
Securities.
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Whenever the beneficial ownership of any Preferred Trust Securities is
determined through the books of a Securities Depository, the requirements in
this Trust Agreement of holding, delivering or transferring such Preferred Trust
Securities shall be deemed modified with respect to such Preferred Trust
Securities to meet the requirements of the Securities Depository with respect to
actions of the Trustees, the Depositor and the Paying Agent. Any provisions
hereof permitting or requiring delivery of such Preferred Trust Securities
shall, while such Preferred Trust Securities are in a book-entry system, be
satisfied by the notation on the books of the Securities Depository in
accordance with applicable state law.
SECTION 5.13. RIGHTS OF SECURITYHOLDERS. The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.09, and the Securityholders shall not have any
right or title therein other than an undivided beneficial interest in the assets
of the Trust conferred by their Trust Securities and they shall have no right to
call for any partition or division of property, profits or rights of the Trust
except as described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this Trust
Agreement. The Preferred Trust Securities shall have no preemptive or similar
rights and when issued and delivered to Securityholders against payment of the
purchase price therefor will be fully paid and nonassessable undivided
beneficial interests in the assets of the Trust.
SECTION 5.14. CANCELLATION BY TRANSFER AGENT AND REGISTRAR. All Trust
Securities Certificates surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Transfer
Agent and Registrar, be delivered to the Transfer Agent and Registrar and, if
not theretofore canceled, shall be promptly canceled by the Transfer Agent and
Registrar. No Trust Securities Certificates shall be issued in lieu of or in
exchange for any Trust Securities Certificates canceled as provided in this
Section, except as expressly permitted by this Trust Agreement. All canceled
Trust Securities Certificates held by the Transfer Agent and Registrar shall be
disposed of in accordance with customary practices.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. LIMITATIONS ON VOTING RIGHTS. (a) Except as provided in
this Section 6.01, in Section 10.03 and as otherwise required by law, no Holder
of Preferred Trust Securities shall have any right to vote or in any manner
otherwise control the administration, operation and management of the Trust or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association. If the Property Trustee fails to enforce its rights under the
Debentures or this Trust Agreement, a Holder of Preferred Trust Securities may
institute a legal proceeding directly against the Depositor to enforce the
Property Trustee's rights under the Debentures or this Trust Agreement, to the
fullest extent permitted by law, without first instituting any legal proceeding
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against the Property Trustee or any other Person. Notwithstanding the foregoing,
a Holder of Preferred Trust Securities may directly institute a proceeding for
enforcement of payment to such Holder of principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation
preference amount of the Preferred Trust Securities of such Holder on or after
the due dates specified in the Debentures.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 813 of
the Subordinated Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Subordinated
Indenture or the Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at least 66 2/3% of
the aggregate Liquidation Amount of the Outstanding Preferred Trust Securities;
provided, however, that where a consent under the Subordinated Indenture would
require the consent of each Holder of Debentures affected thereby, no such
consent shall be given by any Trustee without the prior written consent of each
Holder of Preferred Trust Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Preferred Trust Securities,
except pursuant to a subsequent vote of the Preferred Trust Securities. The
Property Trustee shall notify all Holders of the Preferred Trust Securities of
any notice of default received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of the Holders of
the Preferred Trust Securities, prior to taking any of the foregoing actions,
the Property Trustee shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will be
classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would materially
adversely affect the powers, preferences or special rights of the Preferred
Trust Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Trust Securities as a class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least 66 2/3% in aggregate
Liquidation Amount of the Outstanding Preferred Trust Securities.
SECTION 6.02. NOTICE OF MEETINGS. Notice of all meetings of the
Holders of Preferred Trust Securities, stating the time, place and purpose of
the meeting, shall be given by the Administrative Trustees pursuant to Section
10.08 to each Holder of a Preferred Trust Security, at his registered address,
at least 15 days and not more than 90 days before the meeting. At any such
meeting, any business properly before the meeting may be so considered whether
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or not stated in the notice of the meeting. Any adjourned meeting may be held as
adjourned without further notice.
SECTION 6.03. MEETINGS OF HOLDERS OF PREFERRED TRUST SECURITIES. No
annual meeting of Securityholders is required to be held. The Administrative
Trustees, however, shall call a meeting of Securityholders to vote on any matter
upon the written request of the Holders of 25% of the then Outstanding Preferred
Trust Securities (based upon their aggregate Liquidation Amount) and may, at any
time in their discretion, call a meeting of Holders of Preferred Trust
Securities to vote on any matters as to which the Holders of Preferred Trust
Securities are entitled to vote.
Holders of 50% of the then Outstanding Preferred Trust Securities
(based upon their aggregate Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Holders of Preferred Trust Securities present, in person or by proxy, holding
more than the lesser of (x) 66 2/3% of the then Outstanding Preferred Trust
Securities (based upon their aggregate Liquidation Amount) held by the Holders
of then Outstanding Preferred Trust Securities present, either in person or by
proxy, at such meeting and (y) 50% of the Outstanding Preferred Trust Securities
(based upon their aggregate Liquidation Amount) shall constitute the action of
the Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
SECTION 6.04. VOTING RIGHTS. Securityholders shall be entitled to one
vote for each $_____ of Liquidation Amount represented by their Trust Securities
in respect of any matter as to which such Securityholders are entitled to vote.
SECTION 6.05. PROXIES, ETC. At any meeting of Securityholders,
any Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, or, if earlier, until eleven months after it is sent and the burden of
proving invalidity shall rest on the challenger.
SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action
which may be taken by Securityholders at a meeting may be taken without a
meeting and without notice if Securityholders holding a majority of all
Outstanding Trust Securities entitled to vote in respect of such action (or such
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larger proportion thereof as shall be required by any express provision of this
Trust Agreement) shall consent to the action in writing (based upon their
aggregate Liquidation Amount).
SECTION 6.07. RECORD DATE FOR VOTING AND OTHER PURPOSES. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or to vote by written consent, or to participate in any
Distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrative Trustees may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Securityholders or the payment
of Distribution or other action including action to be taken by written consent,
as the case may be, as a record date for the determination of the identity of
the Securityholders of record for such purposes.
SECTION 6.08. ACTS OF SECURITYHOLDERS. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to the Administrative Trustees. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Trustees, if made in the manner provided in
this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee deems sufficient.
The ownership of Preferred Trust Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
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 Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
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Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between or among the Securityholders and
the Administrative Trustees with respect to the authenticity, validity or
binding nature of any request, demand, authorization, direction, consent, waiver
or other Act of such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be conclusive with
respect to such matter.
SECTION 6.09. INSPECTION OF RECORDS. Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to the
Administrative Trustees and the Property Trustee, the other records of the Trust
shall be open to inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE PROPERTY
TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee hereby represents
and warrants for the benefit of the Depositor and the Securityholders that:
(a) the Property Trustee is a banking corporation or trust company
duly incorporated, validly existing and in good standing under the laws of the
State of New York;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally binding
agreement of the Property Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
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(d) the execution, delivery and performance by the Property Trustee of
this Trust Agreement will not violate, conflict with or constitute a breach of
the Property Trustee's charter or by-laws; and
(e) the execution, delivery and performance by the Property Trustee of
this Trust Agreement does not require the consent or approval of, the giving of
notice to, or the registration with any Federal or New York banking authority.
SECTION 7.02. DELAWARE TRUSTEE. The Delaware Trustee represents and
warrants for the benefit of the Depositor and the Securityholders that:
(a) the Delaware Trustee is a banking corporation or trust company
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware;
(b) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the Delaware Trustee of
this Trust Agreement will not violate the Delaware Trustee's charter or by-laws;
and
(e) the execution, delivery and performance by the Delaware Trustee of
this Trust Agreement does not require the consent or approval of, the giving of
notice to, or the registration with any Federal or Delaware banking authority.
ARTICLE VIII
THE TRUSTEES
SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be
restricted to those set forth in the express provisions of this Trust Agreement
and, in the case of the Property Trustee, as provided in the Trust Indenture
Act, and no implied covenants or obligations shall be read into this Trust
Agreement against any of the Trustees. For purposes of Sections 315(a) and
315(c) of the Trust Indenture act, the term "default" is hereby defined as an
Event of Default which has occurred and is continuing. Notwithstanding the
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foregoing, no provision of this Trust Agreement shall require any of the
Trustees to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Notwithstanding anything contained
in this Trust Agreement to the contrary, the duties and responsibilities of the
Property Trustee under this Trust Agreement shall be subject to the protections,
exculpations and limitations on liability afforded to the Property Trustee under
this Trust Agreement, the Trust Indenture Act, the Delaware Business Trust Act
and, to the extent applicable, Rule 3a-7 under the Investment Company Act or any
successor rule thereunder. Whether or not therein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section 8.01.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the income and proceeds
from the Trust Property and only to the extent that there shall be sufficient
income or proceeds from the Trust Property to enable the Property Trustee or
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the income and proceeds from the Trust Property to the extent
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.01(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(c) All duties and responsibilities of the Property Trustee contained
in this Trust Agreement are subject to the following:
(i) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Trust Property shall be
to deal with such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to the
protections, exculpations and limitations on liability afforded to the
Property Trustee under this Trust Agreement, the Trust Indenture Act,
the Delaware Business Trust Act and, to the extent applicable, Rule
3a-7 under the Investment Company Act or any successor rule
thereunder;
(ii) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of
the Trust Property or the payment of any taxes or assessments levied
thereon or in connection therewith;
(iii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor. Money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
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established by the Property Trustee pursuant to this Trust Agreement
and except to the extent otherwise required by law; and
(iv) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 8.02. NOTICE OF DEFAULTS. (a) Within ninety (90) days after
the occurrence of any default known to the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.08, notice of such default to the Securityholders and the Depositor, unless
such default shall have been cured or waived. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
(b) Within five Business Days after receipt of notice of the
Debenture Issuer's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Subordinated Indenture, an Administrative Trustee
shall transmit, in the manner and to the extent provided in Section 10.08,
notice of such exercise to the Securityholders and the Property Trustee.
SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the
provisions of Section 8.01 and except as provided by law:
(i) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) if (A) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses
of action or (B) in construing any of the provisions in this Trust
Agreement the Property Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (C) the
Property Trustee is unsure of the application of any provision of this
Trust Agreement, then, except as to any matter as to which the
Preferred Trust Securityholders are entitled to vote under the terms
of this Trust Agreement, the Property Trustee shall deliver a notice
to the Depositor requesting written instructions of the Depositor as
to the course of action to be taken. The Property Trustee shall take
such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from
taking, by the Depositor; provided, however, that if the Property
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Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent
practicable shall not be less than two Business Days), it may, but
shall be under no duty to, take or refrain from taking such action not
inconsistent with this Trust Agreement as it shall deem advisable and
in the best interests of the Securityholders, in which event the
Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(iii) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the
Administrative Trustees;
(iv) the Property Trustee may consult with counsel of its
selection and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(v) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at
the request or direction of any Securityholder pursuant to this Trust
Agreement, unless such Securityholder shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses (including reasonable attorneys' fees and expenses) and
liabilities which might be incurred by it in complying with such
request or direction;
(vi) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if
the Property Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Depositor personally or by agent or attorney;
(vii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Property Trustee shall not
be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
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(viii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Agreement;
(ix) the Property Trustee shall not be charged with knowledge of
any default or Event of Default with respect to the Trust Securities
unless either (A) a Responsible Officer of the Property Trustee shall
have actual knowledge of the default or Event of Default or (B)
written notice of such default or Event of Default shall have been
given to the Property Trustee by the Depositor, the Administrative
Trustees or by any Holder of the Trust Securities;
(x) no provision of this Trust Agreement shall be deemed to
impose any duty or obligation on the Property Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation; and no permissive
or discretionary power or authority available to the Property Trustee
shall be construed to be a duty;
(xi) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Property
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Trust Agreement or adequate indemnity against such risk
or liability is not reasonably assured to it;
(xii) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any tax or securities form) (or
any rerecording, refiling or registration thereof);
(xiii) the Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction; and
(xiv) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (A) may request instructions from the
Holders of the Trust Securities, which instructions may only be given
by the Holders of the same Liquidation Amount of the Trust Securities
as would be entitled to direct the Property Trustee under the terms of
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this Trust Agreement in respect of such remedies, rights or actions,
(B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
SECTION 8.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the title to, or value or condition of, the property of the Trust or any part
thereof, nor as to the validity or sufficiency of this Trust Agreement, the
Debentures or the Trust Securities. The Trustees shall not be accountable for
the use or application by the Trust of the proceeds of the Trust Securities.
SECTION 8.05. MAY HOLD SECURITIES. Any Trustee or any agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, except as provided in the definition
of the term "Outstanding" in Article I, may otherwise deal with the Trust with
the same rights it would have if it were not a Trustee or such agent.
SECTION 8.06. COMPENSATION; FEES; INDEMNITY.
The Depositor agrees:
(i) to pay to the Trustees from time to time reasonable
compensation for all services rendered by the Trustees hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements
and advances reasonably incurred or made by the Trustees in accordance
with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence (gross negligence, in the case of any
Administrative Trustee), bad faith or willful misconduct; and
(iii) to indemnify each Trustee for, and to hold each Trustee
harmless against, any and all loss, damage, claims, liability or
expense incurred without negligence (gross negligence, in the case of
any Administrative Trustee), bad faith or willful misconduct on its
part, arising out of or in connection with the acceptance or
administration of the trust or trusts under this Trust Agreement,
including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
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As security for the performance of the obligations of the Depositor
under this Section, each of the Trustees shall have a lien prior to the Trust
Securities upon all property and funds held or collected by such Trustee as
such, except funds held in trust for the payment of Distributions on the Trust
Securities.
In addition to the rights provided to each Trustee pursuant to the
provisions of the immediately preceding paragraph of this Section 8.06, when a
Trustee incurs expenses or renders services in connection with an Event of
Default resulting from a Bankruptcy Event with respect to the Trust, the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section 8.06 shall survive the termination of
this Trust Agreement.
SECTION 8.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY. (a)
There shall at all times be a Property Trustee hereunder with respect to the
Trust Securities. The Property Trustee shall be a Person that has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article VIII.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind such
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware that
otherwise meets the requirements of applicable Delaware law and that shall act
through one or more persons authorized to bind such entity.
SECTION 8.08. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. The Subordinated Indenture, the Guarantee Agreement, the Indenture
(For Unsecured Debt Securities) dated as of January 1, 1998 of TXU Gas Company
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to The Bank of New York, as trustee, the Guarantee Agreement, dated as of July
2, 1998 between TXU Gas Company, as guarantor and The Bank of New York, as
trustee, and the Amended and Restated Trust Agreement, dated as of July 2, 1998
between TXU Gas Company, as depositor, The Bank of New York, The Bank of New
York (Delaware), Kirk R. Oliver, Laura Anderson, Kevin Lloyd, Jay Rhodes and
Jackie Harrison, as trustees and the several holders referred to therein, shall
be deemed to be specifically described in this Trust Agreement for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Property Trustee
shall have power to appoint, and upon the written request of the Property
Trustee, the Depositor shall for such purpose join with the Property Trustee in
the execution, delivery, and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Property
Trustee either to act as co-trustee, jointly with the Property Trustee, of all
or any part of such Trust Property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Depositor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case a Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(1) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees designated for
such purpose hereunder, shall be exercised, solely by such Trustees.
(2) The rights, powers, duties, and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Property Trustee or by the Property
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction
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in which any particular act is to be performed, the Property Trustee
shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties, and obligations shall be exercised
and performed by such co-trustee or separate trustee.
(3) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 8.09, and, in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee shall
have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the
Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution,
delivery, and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal. A successor to
any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of any Trustee, or
any other such trustee hereunder.
(5) The Property Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee hereunder.
(6) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate
trustee.
SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No
resignation or removal of any Trustee (as the case may be, the "Relevant
Trustee") and no appointment of a successor Relevant Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Relevant Trustee in accordance with the applicable requirements of
Section 8.11.
The Relevant Trustee may resign at any time by giving written notice
thereof to the Securityholders. If the instrument of acceptance by a successor
Relevant Trustee required by Section 8.11 shall not have been delivered to the
resigning Relevant Trustee within 30 days after the giving of such notice of
resignation, the resigning Relevant Trustee may petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by Act of the Common
Trust Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at such time by Act of the
Securityholders of a majority of the aggregate Liquidation Amount of the
Outstanding Preferred Trust Securities, delivered to the Relevant Trustee (in
its individual capacity and on behalf of the Trust).
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If the Relevant Trustee shall resign, be removed or become incapable
of continuing to act as Relevant Trustee at a time when no Debenture Event of
Default shall have occurred and be continuing, the Common Trust Securityholder,
by Act of the Common Trust Securityholder delivered to the retiring Relevant
Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and
the retiring Relevant Trustee shall comply with the applicable requirements of
Section 8.11. If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as the Relevant Trustee at a time when a
Debenture Event of Default shall have occurred and be continuing, the Preferred
Trust Securityholders, by Act of the Preferred Trust Securityholders of a
majority in aggregate Liquidation Amount of the Outstanding Preferred Trust
Securities delivered to the retiring Relevant Trustee, shall promptly appoint a
successor Relevant Trustee or Trustees, and the Relevant Trustee shall comply
with the applicable requirements of Section 8.11. If no successor Relevant
Trustee shall have been so appointed by the Common Trust Securityholders or the
Preferred Trust Securityholders and accepted appointment in the manner required
by Section 8.11, any Securityholder who has been a Securityholder of Trust
Securities for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The retiring Property Trustee shall give notice of its resignation and
its removal and an appointment of a successor Trustee to all Securityholders in
the manner provided in Section 10.08 and shall give notice to the Depositor.
Such notice shall include the address of its Corporate Trust Office.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by (i) the
unanimous act of remaining Administrative Trustees if there are at least two of
them or (ii) otherwise by the Depositor (with the successor in each case being
an individual who satisfies the eligibility requirements for Administrative
Trustees or Delaware Trustee, as the case may be, set forth in Section 8.07).
Additionally, notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event the Depositor reasonably believes that any
Administrative Trustee who is a natural person has become incompetent or
incapacitated, the Depositor, by notice to the remaining Trustees, may terminate
the status of such Person as an Administrative Trustee (in which case the
vacancy so created will be filled in accordance with the preceding sentence).
No Property Trustee or Delaware Trustee shall be liable for the acts
or omissions to act of any successor Property Trustee or Delaware Trustee.
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the
appointment hereunder of a successor Relevant Trustee, the retiring Relevant
Trustee and each successor Trustee shall execute and deliver an amendment hereto
wherein each successor Relevant Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee all the rights,
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powers, trusts and duties of the retiring Relevant Trustee and (2) shall add to
or change any of the provisions of this Trust Agreement as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Relevant Trustee, it being understood that nothing herein or in such
amendment shall constitute such Relevant Trustees co-trustees of the same trust
and that each such Relevant Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Relevant Trustee and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Trustee all
Trust Property, all proceeds thereof and money held by such retiring Relevant
Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the retiring
Relevant Trustee shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant Trustee all such
rights, powers and trusts referred to in the first or second preceding
paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article VIII.
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any Person into which the Property Trustee or the Delaware Trustee or
any Administrative Trustee or any Trustee that is not a natural person may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article VIII, without the execution or filing
of any paper, the giving of any notice or any further act on the part of any of
the parties hereto.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
TRUST. If and when the Property Trustee shall be or become a creditor of the
Depositor or the Trust (or any other obligor upon the Debentures or the Trust
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
Trust (or any such other obligor).
SECTION 8.14. REPORTS BY PROPERTY TRUSTEE. (a) The Property Trustee
shall transmit to Securityholders such reports concerning the Property Trustee
and its actions under this Trust Agreement as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Such of those reports as are required to be transmitted by the Property Trustee
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pursuant to Section 313(a) of the Trust Indenture Act shall be dated as of the
next preceding _________ 15, and shall be transmitted no later than ________ 1
of each year, commencing _________1, ____.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each stock exchange upon which
the Trust Securities are listed, with the Commission and with the Depositor. The
Depositor will notify the Property Trustee when any Trust Securities are listed
on any stock exchange.
SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information, if any, and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents by the Depositor to the
Property Trustee is for informational purposes only and the Property Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Depositor's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 8.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each
of the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement (including any covenants
compliance with which constitutes a condition precedent) that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 8.17. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be seven, provided that Depositor, by
written instrument, may increase or decrease the number of Administrative
Trustees.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
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SECTION 8.18. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Sections
2.07(a) and 2.07(c), including any registration statement or amendment thereto
filed with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from time
to time to such of their number the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 8.19. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Trust Securities, the
Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting practices
or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the
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Indemnified Person shall not constitute a breach of this Trust
Agreement or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise;
and
(c) Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act, whenever in this Trust Agreement an
Indemnified Person is permitted or required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it reasonably desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this Trust
Agreement or by applicable law.
ARTICLE IX
TERMINATION AND LIQUIDATION
SECTION 9.01. DISSOLUTION UPON EXPIRATION DATE. The Trust shall
automatically dissolve on December 31, 2040 (the "Expiration Date") and the
Trustees shall take such action as is required by Section 9.04.
SECTION 9.02. EARLY TERMINATION. Upon the first to occur of any of the
following events (such first occurrence, an "Early Termination Event"):
(i) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor/Debenture Issuer;
(ii) the redemption of all of the Preferred Trust Securities;
(iii) an order for judicial dissolution of the Trust having been
entered by a court of competent jurisdiction;
(iv) the election by the Depositor to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust,
distribute the Debentures to the Holders of Preferred Trust Securities
in liquidation of the Trust;
the Trust shall dissolve and the Trustees shall take such action as is required
by Section 9.04.
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SECTION 9.03. TERMINATION. The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall terminate
upon the latest to occur of the following: (i) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.04, or upon the redemption of all of the Trust Securities pursuant to Section
4.02 or 9.04(d), of all amounts required to be distributed hereunder upon the
final payment of the Trust Securities; (ii) the payment of any expenses owed by
the Trust; and (iii) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
SECTION 9.04. LIQUIDATION. (a) Upon the Expiration Date or if an Early
Termination Event specified in clause (i), (iii) or (iv) of Section 9.02 occurs,
after satisfaction of creditors of the Trust, if any, as provided by applicable
law, the Trust shall be liquidated by the Property Trustee as expeditiously as
the Property Trustee determines to be appropriate by distributing to each
Securityholder a Like Amount of Debentures, subject to Section 9.04(e). Notice
of liquidation shall be given by the Administrative Trustees by first-class
mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to
the Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or, if Section 9.04(e) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Sections 9.02(ii), 9.04(d) or 9.04(e) apply, in order
to effect the liquidation of the Trust hereunder, and any resulting distribution
of the Debentures to Securityholders, the Property Trustee shall establish a
record date for such distribution (which shall be not more than 45 days prior to
the Liquidation Date) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Debentures in exchange for
the Outstanding Trust Securities Certificates.
(c) Except where Sections 9.02(ii), 9.04(d) or 9.04(e) apply, after
any Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will,
after satisfaction of liabilities to creditors of the Trust, if any, as provided
by applicable law, be issued to Holders of Trust Securities Certificates, upon
surrender of such Trust Securities Certificates to the Administrative Trustees
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or their agent for exchange, (iii) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such Trust Securities Certificates are so
surrendered (and until such Trust Securities Certificates are so surrendered, no
payments or interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (iv) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive, after satisfaction of liabilities to creditors of
the Trust, if any, as provided by applicable law, Debentures upon surrender of
Trust Securities Certificates.
(d) If at any time, a Tax Event shall occur and be continuing, and
either (i) in the opinion of counsel to the Depositor experienced in such
matters, there would in all cases, after effecting the dissolution of the Trust,
after satisfaction of liabilities to creditors of the Trust, if any, as provided
by applicable law, and the distribution of the Debentures to the Holders of the
Preferred Trust Securities in exchange therefor, be more than an insubstantial
risk that an Adverse Tax Consequence would continue to exist or (ii) the
Debentures are not held by the Trust, then the Depositor shall have the right to
redeem the Debentures, in whole but not in part, at any time within 90 days
following the occurrence of the Tax Event. Whether or not a Tax Event has
occurred, the Depositor has the right, at any time, to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust, if any, as provided
by applicable law, cause the Debentures to be distributed to the Holders of the
Preferred Trust Securities and Common Trust Securities in liquidation of the
Trust on a pro rata basis.
(e) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
wound-up, by the Property Trustee in such manner as the Property Trustee
determines. In such event, Securityholders will be entitled to receive out of
the assets of the Trust available for distribution to Securityholders, after
satisfaction of liabilities to creditors of the Trust, if any, as provided by
applicable law, an amount equal to the Liquidation Amount per Trust Security
plus accumulated and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"). If, upon any such winding up, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The Holder of Common Trust Securities will be
entitled to receive Liquidation Distributions upon any such winding-up pro rata
(determined as aforesaid) with Holders of Preferred Trust Securities, except
that, if a Debenture Event of Default has occurred and is continuing or if a
Debenture Event of Default has not occurred solely by reason of a requirement
that time lapse or notice be given, the Preferred Trust Securities shall have a
priority over the Common Trust Securities.
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<PAGE>
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. GUARANTEE BY THE DEPOSITOR AND ASSUMPTION OF
OBLIGATIONS. Subject to the terms and conditions hereof, the Depositor
irrevocably and unconditionally guarantees to each Person to whom the Trust is
now or hereafter becomes indebted or liable (the "Beneficiaries"), and agrees to
assume liability for, the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
"Obligations" means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders the amounts due such
Holders pursuant to the terms of the Preferred Trust Securities. This guarantee
and assumption is intended to be for the benefit, of, and to be enforceable by,
all such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.
SECTION 10.02. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The death,
incapacity, bankruptcy, dissolution or termination of any Person having an
interest, beneficial or otherwise, in a Trust Security shall not operate to
terminate this Trust Agreement, nor dissolve, terminate or annul the Trust, nor
entitle the legal representatives or heirs of such Person or any Securityholder
for such Person, to claim an accounting, take any action or bring any proceeding
in any court for a partition or winding up of the arrangements contemplated
hereby, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
SECTION 10.03. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the Trust
(on approval of a majority of the Administrative Trustees and the Depositor,
without the consent of any Securityholders), (i) to cure any ambiguity, correct
or supplement any provision herein or therein which may be inconsistent with any
other provision herein or therein, or to make any other provisions with respect
to matters or questions arising under this Trust Agreement, (ii) to change the
name of the Trust or (iii) to modify, eliminate or add to any provisions of this
Trust Agreement to such extent as shall be necessary to ensure that the Trust
will not be classified for United States federal income tax purposes other than
as a "grantor trust" and not as an association taxable as a corporation at any
time that any Trust Securities are outstanding or to ensure the Trust's
exemption from the status of an "investment company" under the Investment
Company Act; provided, however, that such action shall not adversely affect in
any material respect the interests of any Securityholder and, in the case of
clause (i), any such amendments of this Trust Agreement shall become effective
when notice thereof is given to the Securityholders.
(b) Except as provided in Sections 6.01(c) and 10.03(c), any provision
of this Trust Agreement may be amended by the Administrative Trustees and the
Depositor with (i) the consent of Holders of Trust Securities representing not
less than a majority (based upon Liquidation Amounts) of the outstanding Trust
Securities and (ii) receipt by the Trustees of an Opinion of Counsel to the
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<PAGE>
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for federal income tax purposes or the Trust's exemption from
status as an "investment company" under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder, this Trust
Agreement may not be amended to (i) adversely change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date.
(d) Notwithstanding any other provisions of this Trust Agreement, no
amendment to this Trust Agreement may be made if, as a result of such amendment,
the Trust would not be classified as a "grantor trust" but an association
taxable as a corporation for United States federal income tax purposes or would
to fail or cease to qualify for the exemption from status of an "investment
company" under the Investment Company Act afforded by Rule 3a-5 thereunder.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Trustees, this Trust Agreement may
not be amended in a manner which imposes any additional obligation on the
Depositor or any Trustee or, in the case of the Trustees, which affects any of
their respective rights, duties or immunities hereunder.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) The Property Trustee and the Delaware Trustee may join in the
execution of any amendment to the Trust Agreement and are entitled to rely upon
an Opinion of Counsel as conclusive evidence that any amendment to this Trust
Agreement entered into pursuant to this Section 10.03 is authorized or permitted
by, and conforms to, the terms of this Section 10.03, has been duly authorized
by and lawfully executed and delivered on behalf of the other requisite parties,
and that it is proper for the Property Trustee under the provisions of this
Section 10.03 to accept the additional trusts created thereby and, if so
requested, for the Property Trustee or the Delaware Trustee to join in the
execution thereof.
SECTION 10.04. SEPARABILITY. In case any provision in this Trust
Agreement or in the Trust Securities Certificates 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.
SECTION 10.05. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
-48-
<PAGE>
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES).
SECTION 10.06. SUCCESSORS. This Trust Agreement shall be binding upon
and shall inure to the benefit of any successor to the Trust or the Relevant
Trustees or any of them, including any successor by operation of law.
SECTION 10.07. HEADINGS. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
SECTION 10.08. NOTICE AND DEMAND. Any notice, demand or other
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Preferred Trust Securityholder, to such
Preferred Trust Securityholder as such Securityholder's name and address may
appear on the Securities Register and (ii) in the case of the Depositor, to TXU
Gas Company, Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201, Attention:
Treasurer, facsimile no. 214-812-2488, with a copy to the Secretary, facsimile
no. 214-812-2488. Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for all
purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (i) with respect to the Property Trustee or the
Delaware Trustee, The Bank of New York, 101 Barclay Street, Floor 21 West, New
York, New York 10286, Attention: Corporate Trust Department, with a copy to: The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
19711, Attention: Corporate Trust Department, and (ii) with respect to the Trust
or the Administrative Trustees, at the address above for notice to the
Depositor, marked "Attention: Administrative Trustees for [Name of Trust]". Such
notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.
SECTION 10.09. AGREEMENT NOT TO PETITION. Each of the Trustees and the
Depositor agrees for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
IX, it shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, reorganization, arrangement, insolvency, liquidation or
other similar law (including, without limitation, the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.09, the Property Trustee
agrees, for the benefit of Securityholders, that it shall file an answer with
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<PAGE>
the bankruptcy court or otherwise properly contest the filing of such petition
by the Depositor against the Trust or the commencement of such action and raise
the defense that the Depositor has agreed in writing not to take such action and
should be estopped and precluded therefrom and such other defenses, if any, as
counsel for the Property Trustee or the Trust may assert. The provisions of this
Section 10.09 shall survive the termination of this Trust Agreement.
SECTION 10.10. CONFLICT WITH TRUST INDENTURE ACT. (a) This Trust
Agreement is subject to the provisions of the Trust Indenture Act that are
required or deemed to be part of this Trust Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included in this
Trust Agreement by any of the provisions of the Trust Indenture Act, such
required or deemed provision shall control.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing interests in the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF
ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND
ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS
AND PROVISIONS OF THIS TRUST AGREEMENT AND THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING,
OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH
OTHERS.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Trust Agreement to be duly executed, all as of the day and year first above
written.
TXU GAS COMPANY
By:
--------------------------------
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:
--------------------------------
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
--------------------------------
Title:
-------------------------------
solely in his (her) capacity as
Administrative Trustee
-------------------------------
solely in his (her) capacity as
Administrative Trustee
-------------------------------
solely in his (her) capacity as
Administrative Trustee
-51-
<PAGE>
-------------------------------
solely in his (her) capacity as
Administrative Trustee
-------------------------------
solely in his (her) capacity as
Administrative Trustee
-52-
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
[NAME OF TRUST]
THIS CERTIFICATE OF TRUST of [Name of Trust] (the "Trust"), dated as
of _______________, ____, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust being created hereby is [Name
of Trust].
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), White Clay Center, Route 273, Newark, New Castle
County, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective as of
its filing.
A-1
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the only trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK (DELAWARE), _________________________,
not in its individual capacity not in her individual capacity
but solely as Trustee but solely as Trustee
By: By:
------------------------ -------------------------
Name: _______________________
Title: Authorized Signatory
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By:
------------------------
Name: _______________________
Title:
A-2
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS
PROVIDED IN THE TRUST AGREEMENT
Certificate Number Number of Common Trust Securities
C-[ ]
Certificate Evidencing Common Trust Securities
of
[Name of Trust]
Common Trust Securities
(liquidation amount $_____ per Common Trust Security)
[Name of Trust], a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that TXU Gas Company (the
"Holder") is the registered owner of _____ (_____) common securities of the
Trust representing undivided beneficial interests in the assets of the Trust and
designated the Common Trust Securities (liquidation amount $_____ per Common
Trust Security) (the "Common Trust Securities"). Except as permitted by Section
5.10 of the Trust Agreement (as defined below), the Common Trust Securities are
not transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Trust Securities are set forth in, and this certificate
and the Common Trust Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of ______, ____, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of the Common Trust Securities as set forth therein. The Trust will
furnish a copy of the Trust Agreement to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
B-1
<PAGE>
IN WITNESS WHEREOF, an Administrative Trustee of the Trust has
executed this certificate for and on behalf of the Trust this ___ day of ____,
____.
[Name of Trust]
By:
--------------------------------------
not in his (her) individual capacity, but
solely as Administrative Trustee
B-2
<PAGE>
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ______, ____ between TXU Gas Company, a Texas
corporation ("TXU Gas"), and [Name of Trust], a Delaware business trust (the
"Trust").
WHEREAS, the Trust intends to issue its Common Trust Securities (the
"Common Trust Securities") to and receive Debentures from TXU Gas and to issue
its __% Cumulative Trust Preferred Capital Securities (the "Preferred Trust
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust dated
as of ______, ____ as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, TXU Gas is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the acceptance of the Preferred
Trust Securities by each holder thereof, which acceptance TXU Gas hereby agrees
shall benefit TXU Gas and which acceptance TXU Gas acknowledges will be made in
reliance upon the execution and delivery of this Agreement, TXU Gas, including
in its capacity as holder of the Common Trust Securities, and the Trust hereby
agree as follows:
ARTICLE I
Section 1.01. Assumption by TXU Gas. Subject to the terms and
---------------------
conditions hereof, TXU Gas hereby irrevocably and unconditionally assumes the
full payment, when and as due, of any and all Obligations (as hereinafter
defined) to each person or entity to whom the Trust is now or hereafter becomes
indebted or liable (the "Beneficiaries"). As used herein, "Obligations" means
any indebtedness, expenses or liabilities of the Trust, other than obligations
of the Trust to pay to holders of any Preferred Trust Securities the amounts due
such holders pursuant to the terms of the Preferred Trust Securities. This
Agreement is intended to be for the benefit of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and be
-----------------
of no further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any time any holder of
Preferred Trust Securities or any Beneficiary must restore payment of any sums
paid under the Preferred Trust Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by and between TXU Gas and The Bank of
New York, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
C-1
<PAGE>
Section 1.03. Waiver of Notice. TXU Gas hereby waives notice of
----------------
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and TXU Gas hereby waives presentment, demand for payment, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
Section 1.04. No Impairment. The obligations, covenants, agreements
-------------
and duties of TXU Gas under this Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.
Neither the Trust nor any Beneficiary shall have any obligation to give notice
to, or obtain the consent of, TXU Gas with respect to the happening of any of
the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this Agreement
-----------
directly against TXU Gas and TXU Gas waives any right or remedy to require that
any action be brought against the Trust or any other person or entity before
proceeding against TXU Gas.
ARTICLE II
Section 2.01. Binding Effect. All of the obligations,
--------------
covenants and agreements contained in this Agreement shall bind the successors,
assigns, receivers, trustees and representatives of TXU Gas and shall inure to
the benefit of the Beneficiaries and their successors and assigns.
Section 2.02. Amendment. So long as there remains any Beneficiary or
---------
any Preferred Trust Securities of any series shall be outstanding, this
Agreement shall not be modified or amended in any manner adverse to such
Beneficiary or to the holders of the Preferred Trust Securities.
C-2
<PAGE>
Section 2.03. Notices. Any notice, request or other communication
-------
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex), to wit:
[Name of Trust]
c/o ________________, Administrative Trustee
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
TXU Gas Company
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
Attention: Treasurer
SECTION 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES).
C-3
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
TXU GAS COMPANY
By:
--------------------------------
Name:
Title:
[NAME OF TRUST]
By:
--------------------------------
not in his (her) individual capacity, but
solely as Administrative Trustee
C-4
<PAGE>
[Clearing Agency Legend]
EXHIBIT D
Certificate Number Number of Preferred Trust Securities
P- CUSIP NO.
Certificate Evidencing Preferred Trust Securities
of
[Name of Trust]
__% Cumulative Trust Preferred Capital Securities
(liquidation amount $_____ per Preferred Trust Security)
[Name of Trust], a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that ____________ (the
"Holder") is the registered owner of _____ (_____) Preferred Trust Securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust and designated the [Name of Trust] ___% Cumulative Trust Preferred Capital
Securities (liquidation amount $_____ per Preferred Trust Security) (the
"Preferred Trust Securities"). The Preferred Trust Securities are transferable
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer as provided in Section 5.04 or 5.12 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Trust Securities are set forth
in, and this certificate and the Preferred Trust Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Amended and Restated Trust Agreement of the Trust dated as of ______, ____,
as the same may be amended from time to time (the "Trust Agreement"). The holder
of this certificate is entitled to the benefits of the Guarantee Agreement of
TXU Gas Company, a Texas corporation, and The Bank of New York, as guarantee
trustee, dated as of ______, ____ (the "Guarantee") to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee
to the holder of this certificate without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
D-1
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate for and on behalf of the Trust.
Dated:
[NAME OF TRUST]
By:
-------------------------------------
not in his (her) individual capacity,
but solely as Administrative Trustee
Countersigned and Registered:
-------------------------------,
Transfer Agent and Registrar
By:
--------------------------------------
(Authorized Signature)
D-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Trust Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
of the Preferred Trust Securities represented by this Certificate and
irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
attorney to transfer such Preferred Trust Securities Certificate on the books of
the Trust. The attorney may substitute another to act for him or her.
Date:__________________
Signature:________________________
(Sign exactly as your name appears on the other side of this Preferred Trust
Securities Certificate)
Signature:________________________
(Sign exactly as your name appears on the other side of this Preferred Trust
Securities Certificate)
TXU GAS COMPANY
OFFICER'S CERTIFICATE
[ , the ] of TXU
Gas ------------------------- ----------------
Company (the "Company"), pursuant to the authority granted in the
Board Resolutions of the Company, dated , , and
---------- ----
Sections 201 and 301 of the Indenture defined herein, does hereby
certify to The Bank of New York (the "Trustee"), as Trustee under
the Indenture (For Unsecured Subordinated Debt Securities
relating to Trust Securities) of the Company dated as of June 1,
1998 (the "Indenture") that:
1. The securities of the series to be issued under
-----
the Indenture shall be designated " % Junior
--
Subordinated Debentures, Series " (the "Debentures of
-
the Series"). The Debentures of the Series
----- -----
are to be issued to The Bank of New York, as Property
Trustee (the "Property Trustee") of [Name of Trust], a
Delaware statutory business trust (the "Trust"). All
capitalized terms used in this certificate which are
not defined herein but are defined in the Indenture or
in Exhibit A hereto shall have the meanings set forth
in the Indenture or in Exhibit A, respectively;
2. The Debentures of the Series shall be limited in
-----
aggregate principal amount to $ at any time
-----------
Outstanding, except as contemplated in Section 301(b)
of the Indenture;
3. The Debentures of the Series shall mature and the
-----
principal shall be due and payable together with all
accrued and unpaid interest thereon on , ;
------ ----
4. The Debentures of the Series shall bear interest
-----
from, and including, [ ][the date of original
--------
issuance], at the rate of % per annum, payable
--
quarterly in arrears on , , and
--------- ------- ------
of each year (each, an "Interest Payment
---------
Date") commencing , . With respect to the
--------- ----
Debentures of the Series, the term "Interest
-----
Period" shall mean each period from, and including, an
Interest Payment Date to, but excluding, the next
succeeding Interest Payment Date, except that the first
Interest Period shall commence on [ ][the date
--------
of original issuance]. The amount of interest payable
for any Interest 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 in such period. Interest
on the Debentures of the Series will accrue from,
-----
and including, [ ][the date of original
-------
issuance], but if interest has been paid on such
Debentures of the Series, then from the most
-----
recent 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), in each case with the same force and
effect as if made on such Interest Payment Date;
5. Each installment of interest on a Debenture of the
Series shall be payable to the Person in whose
-----
name such Debenture of the Series is registered
-----
in the Securities Register on the close of business on
the fifteenth day (whether or not a Business Day)
preceding the corresponding Interest Payment Date (the
"Regular Record Date") for the Debentures of the
----
Series; provided, however, that the Company shall have
the right to change the Regular Record Date by one or
more Officer's Certificates. Any installment of
interest on the Debentures of the Series not
-----
punctually paid or duly provided for shall forthwith
cease to be payable to the Holders of such Debentures
of the Series on such Regular Record Date, and
-----
may be paid to the Persons in whose name the Debentures
of the Series are registered in the Securities
-----
Register at the close of business on a Special Record
Date to be fixed by the Trustee for the payment of such
Defaulted Interest. Notice of such Defaulted Interest
and Special Record Date shall be given to the Holders
of the Debentures of the Series not less than 10
-----
days prior to such Special Record Date in any lawful
manner not inconsistent with the requirements of any
securities exchange on which such Debentures of the
Series may be listed, and upon such notice as may
-----
be required by such exchange, all as more fully
provided in the Indenture;
6. The principal and each installment of interest on the
Debentures of the Series shall be payable at, and
-----
registration and registration of transfers and
exchanges in respect of the Debentures of the
-----
Series may be effected at, the office or agency of the
Company in The City of New York; provided that payment
of interest may be made at the option of the Company by
check mailed to the address of the persons entitled
thereto as such addresses appear in the Securities
Register. Notices and demands to or upon the Company
in respect of the Debentures of the _____ Series may be
served at such office or agency of the Company in The
City of New York. The Corporate Trust Office of the
Trustee will initially be the agency of the Company for
such payment, registration and registration of
transfers and exchanges and services of notices and
demands, and the Company hereby appoints the Trustee as
its agent for all such purposes; provided, however,
that the Company reserves the right to change, by one
or more Officer's Certificates, any such office or
agency and such agent. The Trustee will be the
Security Registrar and the Paying Agent for the
Debentures of the Series;
-----
7. The Debentures of the Series will be redeemable
-----
at the option of the Company on or after , ,
------ ----
at any time in whole and from time to time in part,
upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture, at a Redemption
Price equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon to the
Redemption Date.
If at any time a Tax Event (as defined below) shall
occur and be continuing and either (i) in the opinion
of counsel to the Company experienced in such matters,
there would in all cases, after effecting the
termination of the Trust, after satisfaction of
liabilities to creditors of the Trust, if any, as
provided by applicable law, and the distribution of the
Debentures of the Series to the holders of the
-----
Preferred Trust Securities, in exchange therefor, be
more than an insubstantial risk that an Adverse Tax
Consequence (as defined below) would continue to exist
or (ii) the Debentures of the Series are not held
-----
by the Trust, then the Company shall have the right to
redeem the Debentures of the Series, in whole but
-----
not in part, at any time within 90 days following the
occurrence of the Tax Event, at 100% of the principal
amount thereof plus accrued and unpaid interest thereon
to the Redemption Date.
"Tax Event" means the receipt by the Trust or the
Company of an opinion of counsel experienced in such
matters to the effect that, as a result of (a) any
amendment to, clarification of, or change (including
any announced prospective change) in, the laws or
treaties (or any regulations thereunder) of the United
States or any political subdivision or taxing authority
thereof or therein affecting taxation, (b) any judicial
decision or any official administrative pronouncement,
ruling, regulatory procedure, notice or announcement
(including any notice or announcement of intent to
issue or adopt any such administrative pronouncement,
ruling, regulatory procedure or regulation) (each, an
"Administrative Action"), or (c) any amendment to,
clarification of, or change in the official position or
the interpretation of any such Administrative Action or
judicial decision or any interpretation or
pronouncement that provides for a position with respect
to such Administrative Action or judicial decision that
differs from the theretofore generally accepted
position, in each case by any legislative body, court,
governmental authority or regulatory body, irrespective
of the time or manner in which such amendment,
clarification or change is introduced or made known,
which amendment, clarification, or change is effective,
which Administrative Action is taken or which judicial
decision is issued, in each case on or after the date
of issuance of the Preferred Trust Securities, there is
more than an insubstantial risk that (i) the Trust is,
or will be, subject to United States federal income tax
with respect to interest received on the Debentures of
the Series, (ii) interest payable by the Company
-----
on the Debentures of the Series is not, or will
-----
not be, fully deductible by the Company for United
States federal income tax purposes, or (iii) the Trust
is, or will be, subject to more than a de minimis
amount of other taxes, duties or other governmental
charges (each of the circumstances described in clauses
(i), (ii) or (iii) being an "Adverse Tax Consequence");
8. So long as any Debentures of the Series are
-----
Outstanding, the failure of the Company to pay interest
on any Debentures of the Series within 30 days
-----
after the same becomes due and payable (whether or not
payment is prohibited by the provisions of Article
Fifteen of the Indenture) shall constitute an Event of
Default; provided, however, that a valid extension of
the interest payment period by the Company as
contemplated in Section 311 of the Indenture and
paragraph (9) of this Certificate shall not constitute
a failure to pay interest for this purpose;
9. Pursuant to Section 311 of the Indenture, the Company
shall have the right, at any time and from time to time
during the term of the Debentures of the Series,
-----
so long as the Company is not in default in the payment
of interest on the Securities of any series under the
Indenture, to extend the interest payment period to a
period not exceeding 20 consecutive quarterly periods
(an "Extension Period") during which period interest
(calculated for each Interest Period in the manner
provided for in paragraph (4) of this Certificate, as
if the interest payment period had not been so
extended) will be compounded quarterly. At the end of
the Extension Period, the Company shall pay all
interest accrued and unpaid (together with interest
thereon at the rate specified for the Debentures of the
Series, compounded quarterly, to the extent
-----
permitted by applicable law). However, during any such
Extension Period, the Company shall not declare or pay
any dividend or distribution (other than a dividend or
distribution in common stock of the Company) on, or
redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, repurchase
or redeem any indebtedness that is pari passu with the
Debentures of the Series, or make any guarantee
-----
payments with respect to the foregoing ("Restricted
Payments").
Prior to the termination of any such Extension Period,
the Company may further extend the interest payment
period, provided that such Extension Period together
with all such previous and further extensions thereof
shall not exceed 20 consecutive quarterly periods at
any one time or extend beyond the Maturity of the
Debentures of the Series. Any Extension Period
-----
with respect to payment of interest on the Debentures
of the Series, or any extended interest payment
-----
period in respect of similar securities will apply to
the Debentures of the Series and all such
-----
securities and will also apply to distributions with
respect to the Preferred Trust Securities and all other
securities with terms substantially the same as the
Preferred Trust Securities. Upon the termination of
any such Extension Period and the payment of all
amounts then due, including interest on deferred
interest payments, the Company may elect to begin a new
Extension Period, subject to the above requirements.
No interest shall be due and payable during an
Extension Period, except at the end thereof. The
Company will give the Trust and the Trustee notice of
its election of an Extension Period prior to the
earlier of (i) one Business Day prior to the record
date for the distribution which would occur but for
such election or (ii) the date the Company is required
to give notice to any securities exchange on which the
Debentures of the Series may be listed or any
----
other applicable self-regulatory organization of the
record date. The Company will cause the Trust to send
notice of such election to the holders of Preferred
Trust Securities;
10. At any time, the Company will have the right to
dissolve the Trust and, after satisfaction of
liabilities to creditors, if any, of the Trust as
provided by applicable law, cause the Debentures of the
Series to be distributed to the holders of the
-----
Preferred Trust Securities;
11. So long as any Securities are outstanding under the
Indenture, the Company shall not make any Restricted
Payments at any time the Company is in default under
the Guarantee with respect to the Trust or is in
default with respect to payments due on any Outstanding
Securities;
12. In the event that, at any time subsequent to the
initial authentication and delivery of the Debentures
of the Series, the Debentures of the _____ Series
-----
are to be held in global form by a securities
depositary, the Company may at such time establish the
matters contemplated in clause (r) in the second
paragraph of Section 301 of the Indenture in an
Officer's Certificate supplemental to this Certificate;
13. No service charge shall be made for the registration of
transfer or exchange of the Debentures of the
-----
Series; provided, however, that the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection
with the exchange or transfer;
14. If the Company shall make any deposit of money and/or
Government Obligations with respect to any Debentures
of the Series, or any portion of the principal
-----
amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's
Certificate described in clause (z) in the first
paragraph of said Section 701 unless the Company shall
also deliver to the Trustee, together with such
Officer's Certificate, either:
(A) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Debentures of the
-----
Series, shall assume the obligation (which shall be
absolute and unconditional) to irrevocably deposit with
the Trustee or Paying Agent such additional sums of
money, if any, or additional Government Obligations
(meeting the requirements of Section 701), if any, or
any combination thereof, at such time or times, as
shall be necessary, together with the money and/or
Government Obligations theretofore so deposited, to pay
when due the principal of and premium, if any, and
interest due and to become due on such Debentures of
the Series or portions thereof, all in accordance
-----
with and subject to the provisions of said Section 701;
provided, however, that such instrument may state that
the obligation of the Company to make additional
deposits as aforesaid shall be subject to the delivery
to the Company by the Trustee of a notice asserting the
deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation
thereof; or
(B) an Opinion of Counsel, based on a change in
law, to the effect that the Holders of such Debentures
of the Series, or portions of the principal
-----
amount thereof, will not recognize income, gain or loss
for United States federal income tax purposes as a
result of the satisfaction and discharge of the
Company's indebtedness in respect thereof and will be
subject to United States federal income tax on the same
amounts, at the same times and in the same manner as if
such satisfaction and discharge had not been effected;
15. The Trustee, the Security Registrar and the Company
will have no responsibility under the Indenture for
transfers of beneficial interests in the Debentures of
the Series;
-----
16. The Debentures of the Series shall have such
-----
other terms and provisions as are provided in the form
thereof set forth in Exhibit A hereto, and shall be
issued in substantially such form;
17. The undersigned has read all of the covenants and
conditions contained in the Indenture and the
definitions in the Indenture relating thereto relating
to the issuance of the Debentures of the Series
-----
and in respect of which this certificate is made;
18. The statements contained in this certificate are based
upon the familiarity of the undersigned with the
Indenture, the documents accompanying this certificate,
and upon discussions by the undersigned with officers
and employees of the Company familiar with the matters
set forth herein;
19. In the opinion of the undersigned, the undersigned has
made such examination or investigation as is necessary
to enable the undersigned to express an informed
opinion whether or not such covenants and conditions
have been complied with; and
20. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including
any covenants compliance with which constitutes a
condition precedent) to the authentication and delivery
of the Debentures of the Series requested in the
-----
accompanying Company Order have been complied with.
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this day of , .
--- ---- ----
<PAGE>
NO.
---------------
CUSIP NO.
----------
EXHIBIT A
[FORM OF FACE OF JUNIOR SUBORDINATED DEBENTURE]
TXU GAS COMPANY
% JUNIOR SUBORDINATED DEBENTURES, SERIES
---- --
TXU GAS 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 referred to on the reverse hereof), for value received,
hereby promises to pay to ,
------------------------------------
or registered assigns, the principal sum of
--------------------
Dollars ($ ) on , , and, except as
----------------- ------- ----
hereinafter provided, to pay interest on said principal sum, from
and including [ ][the date of original issuance], but if
------
interest has been paid on this Security, then from, and
including, the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly in arrears
on , , and of each year (each an
--------- ------- ------ ---------
"Interest Payment Date"), commencing , , at the rate
--------- ----
of % per annum, plus Additional Interest, if any, until the
--
principal hereof is paid or made available for payment. The
amount of interest payable on any Interest Payment Date shall 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 in such period. 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), in each case with the same
force and effect as if made on such Interest Payment Date. The
interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the 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 Regular Record Date for such interest, which shall be the
fifteenth day (whether or not a Business Day) 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.
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.
TXU GAS COMPANY
By:
----------------------
ATTEST:
----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
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>
[FORM OF REVERSE OF JUNIOR SUBORDINATED DEBENTURE]
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 Subordinated Debt Securities relating to Trust
Securities), dated as of June 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 , (the "Officer's Certificate"),
------ ----
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 $ .
-----------
This Security will be redeemable at the option of the
Company on or after , , at any time in whole and from
------ ----
time to time in part, upon not less than 30 nor more than 60
days' notice given as provided in the Indenture, at a Redemption
Price equal to 100% of the principal amount thereof plus accrued
and unpaid interest hereon, including Additional Interest, if
any, to the Redemption Date.
If at any time a Tax Event (as defined below) shall
occur and be continuing and either (i) in the opinion of counsel
to the Company experienced in such matters, there would in all
cases, after effecting the dissolution of the Trust, after
satisfaction of liabilities to creditors of the Trust, if any, as
provided by applicable law, and the distribution of this Security
to the holders of the Preferred Securities of the Trust (the
"Preferred Trust Securities"), in exchange therefor, be more
than an insubstantial risk that an Adverse Tax Consequence (as
defined below) would continue to exist or (ii) this Security is
not held by The Bank of New York as the Property Trustee of [Name
of Trust], a Delaware statutory business trust (the "Trust") for
the benefit of the Trust, then the Company shall have the right
to redeem this Security, in whole but not in part, at any time
within 90 days following the occurrence of the Tax Event, at 100%
of the principal amount thereof plus accrued and unpaid interest
hereon, including Additional Interest, if any, to the Redemption
Date.
"Tax Event" means the receipt by the Trust or the
Company of an opinion of counsel experienced in such matters to
the effect that, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective
change) in, the laws or treaties (or any regulations thereunder)
of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any judicial
decision or any official administrative pronouncement, ruling,
regulatory procedure, notice or announcement (including any
notice or announcement of intent to issue or adopt any such
administrative pronouncement, ruling, regulatory procedure or
regulation) (each, an "Administrative Action"), or (c) any
amendment to, clarification of, or change in the official
position or the interpretation of any such Administrative Action
or judicial decision or any interpretation or pronouncement that
provides for a position with respect to such Administrative
Action or judicial decision that differs from the theretofore
generally accepted position, in each case by any legislative
body, court, governmental authority or regulatory body,
irrespective of the time or manner in which such amendment,
clarification or change is introduced or made known, which
amendment, clarification, or change is effective, which
Administrative Action is taken or which judicial decision is
issued, in each case on or after the date of issuance of the
Preferred Trust Securities, there is more than an insubstantial
risk that (i) the Trust is, or will be, subject to United States
federal income tax with respect to interest received on this
Security, (ii) interest payable by the Company on this Security
is not, or will not be, fully deductible by the Company for
United States federal income tax purposes, or (iii) the Trust is,
or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges (each of the
circumstances described in clauses (i), (ii) or (iii) being an
"Adverse Tax Consequence").
Interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holder of
such Security, or one or more Predecessor Securities, of record
at the close of business on the related Regular Record Date
referred to on the face hereof, all as provided in the Indenture.
In the event of redemption of this Security in part
only, a new Security or Securities of this series and of like
tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon
said provisions.
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 contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities of all
series then Outstanding to waive compliance by the Company with
certain provisions of the Indenture. 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 not less
than 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.
Pursuant to Section 311 of the Indenture, so long as
the Company is not in default in the payment of interest on the
Securities of any series under the Indenture, the Company shall
have the right, at any time and from time to time during the term
of the Securities of this series, to extend the interest payment
period to a period not exceeding 20 consecutive quarterly periods
(an "Extension Period") during which period interest (calculated
for each Interest Period (as defined in the Officer's
Certificate) in the manner provided for in paragraph (4) of the
Officer's Certificate, as if the interest payment period had not
been so extended) will be compounded quarterly. At the end of
the Extension Period, the Company shall pay all interest accrued
and unpaid hereon (together with interest thereon at the rate
specified for the Securities of this series, compounded
quarterly, to the extent permitted by applicable law) and
Additional Interest, if any; provided, however, that during any
such Extension Period, the Company shall not declare or pay any
dividend or distribution (other than a dividend or distribution
in common stock of the Company) on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital
stock, make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any indebtedness that is
pari passu with the Securities of this series, or make any
guarantee payments with respect to the foregoing ("Restricted
Payments"). Prior to the termination of any such Extension
Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all
such previous and further extensions thereof shall not exceed 20
consecutive quarterly periods at any one time or extend beyond
the Maturity of the Securities of this series. Any Extension
Period with respect to payment of interest on the Securities of
this series, or any extended interest payment period in respect
of similar securities will apply to the Securities of this series
and all such securities and will also apply to distributions with
respect to the Preferred Trust Securities and all other
securities with terms substantially the same as the Preferred
Trust Securities. Upon the termination of any such Extension
Period and the payment of all amounts then due, including
interest on deferred interest payments, the Company may elect to
begin a new Extension Period, subject to the above requirements.
No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company shall give the Trustee
notice of its election of an Extension Period prior to the
earlier of (i) one Business Day prior to the record date for the
distribution which would occur but for such election or (ii) the
date the Company is required to give notice to any securities
exchange on which the Securities may be listed or any other
applicable self-regulatory organization of the record date.
The Securities of this series are issuable only in
registered form without coupons in denominations of $ and
-----
any integral multiple 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.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
GUARANTEE AGREEMENT
Between
TXU Gas Company
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
-------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS.............................. 1
SECTION 1.01 Definitions.................................................. 1
ARTICLE II
TRUST INDENTURE ACT.......................... 4
SECTION 2.01 Trust Indenture Act; Application............................. 4
SECTION 2.02 Lists of Holders of Preferred Trust Securities............... 4
SECTION 2.03 Reports by the Guarantee Trustee............................. 4
SECTION 2.04 Periodic Reports to Guarantee Trustee........................ 5
SECTION 2.05 Evidence of Compliance with Conditions Precedent............. 5
SECTION 2.06 Events of Default; Waiver.................................... 5
SECTION 2.07 Event of Default; Notice..................................... 5
SECTION 2.08 Conflicting Interests........................................ 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE............ 6
SECTION 3.01 Powers and Duties of the Guarantee Trustee................... 6
SECTION 3.02 Certain Rights of Guarantee Trustee.......................... 7
SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee........ 9
ARTICLE IV
GUARANTEE TRUSTEE.......................... 10
SECTION 4.01 Guarantee Trustee; Eligibility............................... 10
SECTION 4.02 Compensation and Reimbursement............................... 10
SECTION 4.03 Appointment, Removal and Resignation of Guarantee Trustee.... 11
ARTICLE V
GUARANTEE............................... 12
SECTION 5.01 Guarantee.................................................... 12
SECTION 5.02 Waiver of Notice and Demand.................................. 12
SECTION 5.03 Obligations Not Affected..................................... 12
SECTION 5.04 Rights of Holders............................................ 13
SECTION 5.05 Guarantee of Payment......................................... 14
SECTION 5.06 Subrogation.................................................. 14
SECTION 5.07 Independent Obligations...................................... 14
ARTICLE VI
SUBORDINATION............................. 14
SECTION 6.01 Subordination................................................ 14
<PAGE>
ARTICLE VII
TERMINATION............................... 15
SECTION 7.01 Termination.................................................. 15
ARTICLE VIII
MISCELLANEOUS............................. 15
SECTION 8.01 Successors and Assigns....................................... 15
SECTION 8.02 Amendments................................................... 15
SECTION 8.03 Notices...................................................... 16
SECTION 8.04 Benefit...................................................... 17
SECTION 8.05 Interpretation............................................... 17
SECTION 8.06 Governing Law................................................ 17
<PAGE>
CROSS-REFERENCE TABLE*
---------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ----------
310(a).......................................................... 4.01(a)
310(b).......................................................... 4.01(c), 2.08
310(c).......................................................... Inapplicable
311(a).......................................................... 2.02(b)
311(b).......................................................... 2.02(b)
311(c).......................................................... Inapplicable
312(a).......................................................... 2.02(a)
312(b).......................................................... 2.02(b)
313............................................................. 2.03
314(a).......................................................... 2.04
314(b).......................................................... Inapplicable
314(c).......................................................... 2.05
314(d).......................................................... Inapplicable
314(e).......................................................... 1.01, 2.05,
3.02
314(f).......................................................... 2.01, 3.02
315(a).......................................................... 3.01(d)
315(b).......................................................... 2.07
315(c).......................................................... 3.01
315(d).......................................................... 3.01(d)
316(a).......................................................... 5.04(a), 2.06
316(b).......................................................... 5.03
316(c).......................................................... 2.02
317(a).......................................................... Inapplicable
317(b).......................................................... Inapplicable
318(a).......................................................... 2.01(b)
318(b).......................................................... 2.01
318(c).......................................................... 2.01(a)
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* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as
of , is executed and delivered by TXU Gas Company, a Texas
------------
corporation (the "Guarantor"), and The Bank of New York, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Trust Securities (as defined herein) of [Name of
Trust], a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of among the Trustees named therein,
------------
TXU Gas Company, as Depositor, and the several Holders (as defined therein), the
Issuer is issuing as of the date hereof $ aggregate Liquidation
-------------
Amount of its % Cumulative Trust Preferred Capital Securities (the "Preferred
--
Trust Securities") representing undivided beneficial interests in the assets of
the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Trust Securities are to be issued for sale by
the Issuer and the proceeds are to be invested in $ principal amount
----------
of Debentures (as defined in the Trust Agreement); and
WHEREAS, in order to enhance the value of the Preferred Trust
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the purchase of Debentures, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement for the benefit of the Holders
from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
<PAGE>
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Trust Securities, to the
extent not paid or made by or on behalf of the Issuer: (i) any accrued and
unpaid Distributions that are required to be paid on such Preferred Trust
Securities but only if and to the extent that the Property Trustee has available
in the Payment Account funds sufficient to make such payment, (ii) the
redemption price (the "Redemption Price"), and all accrued and unpaid
Distributions to the date of redemption, with respect to the Preferred Trust
Securities called for redemption by the Issuer but only if and to the extent
that the Property Trustee has available in the Payment Account funds sufficient
to make such payment, (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Trust
Securities as provided in the Trust Agreement or upon a redemption of all of the
Preferred Trust Securities upon maturity or redemption of the Debentures as
provided in the Trust Agreement), the lesser of (a) the aggregate of the
Liquidation Amount of all Preferred Trust Securities and all accrued and unpaid
Distributions on the Preferred Trust Securities to the date of payment but only
if and to the extent that the Property Trustee has available in the Payment
Account funds sufficient to make such payment, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means a Person in whose name a Preferred Trust Security or
Preferred Trust Securities is registered in the Securities Register; provided,
however, that in determining whether the holders of the requisite percentage of
Preferred Trust Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
"Majority in Liquidation Amount of the Preferred Trust Securities"
means a vote by Holders, voting separately as a class, of more than 50% of the
aggregate Liquidation Amount of all Preferred Trust Securities.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President, any Vice President, the
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<PAGE>
Treasurer, or any Assistant Treasurer of the Guarantor, and delivered to the
Guarantee Trustee. Any Officer's Certificate or Opinion of Counsel delivered
with respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that the officer or counsel signing the Officer's
Certificate or the Opinion of Counsel has read the covenant or condition
and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officer's
Certificate or the Opinion of Counsel;
(c) a statement that each such officer or counsel has made such
examination or investigation as, in such officer's or counsel's opinion, is
necessary to enable such officer or counsel to express an informed opinion
as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer or
counsel, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Guarantee Trustee or the Guarantor or an Affiliate of the
Guarantor, or an employee or any thereof, who shall be acceptable to the
Guarantee Trustee.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company, unincorporated organization or
government, or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Corporate Trust Department
of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Subordinated Indenture" means the Indenture (for Unsecured
Subordinated Debt Securities relating to Trust Securities) dated as of June 1,
1998, between the Guarantor (the "Debenture Issuer") and The Bank of New York,
as trustee pursuant to which the Debentures are issued, together with any
indenture supplemental thereto.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
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<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED TRUST SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, not later than 1 and 1 in each
-------- ----
year, a list, in such form as the Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished; provided that, the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Guarantee Trustee by the Guarantor. The Guarantee Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a) of the Trust Indenture Act, subject to the provisions of
Section 311(b) of the Trust Indenture Act, and Section 312(b) of the Trust
Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. Not later than
1 in each year, commencing , the Guarantee Trustee
- -------- ----------------
shall provide to the Holders such reports, if any, as are required by
Section 313(a) of the Trust Indenture Act in the form and in the manner provided
by Section 313(a) of the Trust Indenture Act. Any such report shall be dated as
of the next preceding September 15. The Guarantee Trustee shall also comply with
the requirements of Sections 313(b), (c) and (d) of the Trust Indenture Act.
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<PAGE>
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent provided for in this Guarantee Agreement as and to
the extent required by Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer and any opinion of
counsel required to be given by counsel, in each case pursuant to Section 314(c)
of the Trust Indenture Act, shall be given in the form of an Officer's
Certificate, and an Opinion of Counsel, respectively.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
Liquidation Amount of Preferred Trust Securities may, by vote, on behalf of all
of the Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, a notice of such Event of Default known to the Guarantee Trustee,
unless such default shall have been cured or waived before the giving of such
notice, provided that the Guarantee Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer of the Guarantee Trustee charged
with the administration of the Trust Agreement shall have received written
notice of such Event of Default.
SECTION 2.08 CONFLICTING INTERESTS. The Trust Agreement, the
Subordinated Indenture, the Indenture (For Unsecured Debt Securities) dated as
of January 1, 1998 of TXU Gas Company to The Bank of New York, as trustee, the
Guarantee Agreement, dated as of July 2, 1998 between TXU Gas Company, as
guarantor and The Bank of New York, as trustee, and the Amended and Restated
Trust Agreement, dated as of July 2, 1998 between TXU Gas Company, as depositor,
The Bank of New York, The Bank of New York (Delaware), Kirk R. Oliver, Laura
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<PAGE>
Anderson, Kevin Lloyd, Jay Rhodes and Jackie Harrison, as trustees and the
several holders referred to therein, shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement or any rights hereunder to any Person except a Holder
exercising his or her rights pursuant to Section 5.04 or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Successor Guarantee Trustee. The right, title and interest
of the Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform such duties and only such duties as are
specifically set forth in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement against the Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.06), and is actually known to a Responsible Officer
of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(c) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement, and no
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<PAGE>
implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically required
to be furnished to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in
Liquidation Amount of the Preferred Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or adequate indemnity,
reasonably satisfactory to the Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly provided, every provision of this
Guarantee Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
Sections 3.01(b) and 3.01(c).
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
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<PAGE>
(i) the Guarantee Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document reasonably believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officer's
Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officer's Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel of its
choice, and the written advice or Opinion of Counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion; such counsel
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees; the Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration
of this Guarantee Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the
position of the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including
such reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence and
continuance of an Event of Default, of its obligation under the last
sentence of Section 3.01(b) to exercise the rights and powers vested
in it by this Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
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<PAGE>
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(vii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder;
(viii) whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (1) may request instructions
from the Holders of a Majority in Liquidation Amount of the Preferred
Trust Securities, (2) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(3) shall be protected in relying on or acting in accordance with such
instructions;
(ix) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any tax or securities form) (or
any rerecording, refiling or reregistration thereof); and
(x) the Guarantee Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power or
authority.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
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<PAGE>
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.01(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such reasonable
compensation as the Guarantor and the Guarantee Trustee shall from time to time
agree in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon its request for all reasonable expenses, disbursements
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<PAGE>
and advances incurred or made by the Guarantee Trustee in accordance with the
provisions of this Guarantee Agreement (including the reasonable compensation
and expenses of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any predecessor
Guarantee Trustee for, and to hold it harmless from and against, any and all
loss, damage, claim, liability or expense, including taxes (other than taxes
based upon the income of the Guarantee Trustee) incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance of
the trusts created by, or the administration of, this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the Guarantor
under this Section, the Guarantee Trustee shall have a lien prior to the
Preferred Trust Securities upon all the property and funds held or collected by
the Guarantee Trustee as such, except funds held in trust for the payment of
principal of, and premium (if any) or interest on, particular obligations of the
Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of this
Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall have
occurred and be continuing, the Guarantee Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.03 within 60 days after
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delivery to the Guarantor of an instrument of resignation or removal, the
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor Guarantee
Trustee to all Holders in the manner provided in Section 8.03 hereof. Each
notice shall include the name of the successor Guarantee Trustee and the address
of its Corporate Trust Office.
(f) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED. The obligation of the Guarantor
to make the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Trust
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
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any other sums payable under the terms of the Preferred Trust Securities or
the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Trust Securities
(other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Subordinated Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Property Trustee or the
Holders pursuant to the terms of the Preferred Trust Securities, or any
action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred Trust
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Guarantee Trustee, the Property Trustee or
the Holders to give notice to, or obtain consent of, the Guarantor or any other
Person with respect to the happening of any of the foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) if an Event of Default has
occurred and is continuing, the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Preferred Trust Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of this Guarantee Agreement or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) if the Guarantee Trustee fails to enforce this Guarantee
Agreement, any Holder may enforce this Guarantee Agreement, or institute a legal
proceeding directly against the Guarantor to enforce the Guarantee Trustee's
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<PAGE>
rights under this Guarantee Agreement without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee, or any other Person.
SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication).
SECTION 5.06 SUBROGATION. The Guarantor shall be subrogated to all, if
any, rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Trust Securities and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, including
the Debentures, except those made pari passu or subordinate by their terms,
(ii) pari passu with the most senior preferred or preference stock now or
hereafter issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock of
any Affiliate of the Guarantor, and (iii) senior to all common stock of the
Guarantor. Nothing in this Section 6.01 shall apply to claims of, or payments
to, the Guarantee Trustee under or pursuant to Section 4.02 hereof.
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<PAGE>
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION. Subject to Section 4.02 hereof, this
Guarantee Agreement shall terminate and be of no further force and effect upon:
(i) full payment of the Redemption Price of all Preferred Trust Securities, and
all accrued and unpaid Distributions to the date of redemption, (ii) the
distribution of Debentures to Holders in exchange for all of the Preferred Trust
Securities, or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Trust Securities or under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Trust Securities then outstanding.
Except in connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eleven of the Subordinated Indenture,
the Guarantor shall not assign its obligations hereunder.
SECTION 8.02 AMENDMENTS. This Guarantee Agreement may be amended only
by an instrument in writing entered into by the Guarantor and the Guarantee
Trustee. Except with respect to any changes which do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Guarantee Agreement may only be amended with the prior approval
of the Holders of not less than 66 2/3% in aggregate Liquidation Amount of all
the outstanding Preferred Trust Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of Holders shall apply to the giving of such
approval. Nothing herein contained shall be deemed to require that the Guarantee
Trustee enter into any amendment of this Guarantee Agreement.
-15-
<PAGE>
SECTION 8.03 NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Guarantee Trustee
and the Holders of the Preferred Trust Securities:
TXU Gas Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Facsimile No: 214-812-2488
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative Trustees, at
the Issuer's (and the Administrative Trustees') address set forth below or
such other address as the Administrative Trustees on behalf of the Issuer
may give notice of to the Guarantee Trustee and the Holders:
[Name of Trust]
c/o TXU Gas Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Facsimile No: 214-812-2488
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set forth below
or such other address as the Guarantee Trustee may give notice of to the
Guarantor and the Holders of the Preferred Trust Securities:
The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
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<PAGE>
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Trust Securities.
SECTION 8.05 INTERPRETATION. In this Guarantee Agreement, unless the
context otherwise requires:
(a) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(b) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(d) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice versa;
and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-17-
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
TXU Gas Company
By:
------------------------------------
Name:
Title:
The Bank of New York,
as Guarantee Trustee
By:
------------------------------------
Name:
Title:
-18-
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.
ENERGY PLAZA
1601 BRYAN, 30TH FLOOR
DALLAS, TEXAS 75201-3402
Exhibit 5(a)
August 23, 1999
TXU Gas Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Reference is made to the Registration Statement
(Registration Statement) on Form S-3 to be filed by TXU Gas
Company (Company), formerly known as ENSERCH Corporation, and TXU
Gas Capital II, TXU Gas Capital III and TXU Gas Capital IV
(Trusts) on or about the date hereof, with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
for the registration of (i) securities in an aggregate offering
amount of $500,000,000, including (a) unsecured debt securities
(Debt Securities) of the Company to be issued pursuant to the
terms of the Indenture (For Unsecured Debt Securities), dated as
of January 1, 1998 between the Company and The Bank of New York
(Debt Securities Indenture); and (b) preferred trust securities
(Preferred Trust Securities) of one or more of the Trusts; (ii)
the guarantee of the Company with respect to the Preferred Trust
Securities (the Guarantee); and (iii) the Company's Junior
Subordinated Debentures (Subordinated Debentures) to be issued
pursuant to the terms of the Subordinated Indenture, dated June
1, 1998, between the Company and The Bank of New York
(Subordinated Indenture) and purchased by one or more of the
Trusts with the proceeds of the sale of Preferred Trust
Securities. In connection therewith, we have reviewed such
documents and records as we have deemed necessary to enable us to
express an opinion on the matters covered hereby.
Based upon the foregoing, 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 any Debt
Securities valid, legal and binding obligations of the Company
will have been taken when the Board of Directors of the Company,
or an officer duly authorized thereby, shall have taken such
action, pursuant to the terms of the Debt Securities Indenture,
as may be necessary to establish the terms of such Debt
Securities, and such Debt Securities shall have been issued and
delivered in accordance with the terms and provisions of such
Debt Securities Indenture.
3. All requisite action necessary to make the Guarantee a
valid, legal and binding obligation of the Company will have been
taken when the Board of Directors of the Company, or an officer
duly authorized thereby, shall have taken such action as may be
necessary to establish the terms of the Guarantee and the
Guarantee shall have been duly executed and delivered by the
parties thereto.
4. All requisite action necessary to make the Subordinated
Debentures valid, legal and binding obligations of the Company
will have been taken when the Board of Directors of the Company,
or an officer duly authorized thereby, shall have taken such
action, pursuant to the terms of the Subordinated Indenture, as
may be necessary to establish the terms of the Subordinated
Debentures, and the Subordinated Debentures shall have been
issued and delivered in accordance with the terms and provisions
of the Subordinated Indenture.
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 Thelen Reid &
Priest LLP of New York, New York.
We hereby consent to the use 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/ Timothy A. Mack
------------------------
A Partner
THELEN REID & PRIEST LLP
40 West 57th Street
New York, NY 10019
Exhibit 5(b)
August 23, 1999
TXU Gas Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Reference is made to the Registration Statement
(Registration Statement) on Form S-3 to be filed by TXU Gas
Company (Company), formerly known as ENSERCH Corporation, and TXU
Gas Capital II, TXU Gas Capital III and TXU Gas Capital IV
(Trusts) on or about the date hereof, with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
for the registration of (i) securities in an aggregate offering
amount of $500,000,000, including (a) unsecured debt securities
(Debt Securities) of the Company to be issued pursuant to the
terms of the Indenture (For Unsecured Debt Securities), dated as
of January 1, 1998 between the Company and The Bank of New York
(Debt Securities Indenture); and (b) preferred trust securities
(Preferred Trust Securities) of one or more of the Trusts; (ii)
the guarantee of the Company with respect to the Preferred Trust
Securities (the Guarantee); and (iii) the Company's Junior
Subordinated Debentures (Subordinated Debentures) to be issued
pursuant to the terms of the Subordinated Indenture, dated June
1, 1998, between the Company and The Bank of New York
(Subordinated Indenture) and purchased by one or more of the
Trusts with the proceeds of the sale of Preferred Trust
Securities. In connection therewith, we have reviewed such
documents and records as we have deemed necessary to enable us to
express an opinion on the matters covered hereby.
Based upon the foregoing, 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 any Debt
Securities valid, legal and binding obligations of the Company
will have been taken when the Board of Directors of the Company,
or an officer duly authorized thereby, shall have taken such
action, pursuant to the terms of the Debt Securities Indenture,
as may be necessary to establish the terms of such Debt
Securities, and such Debt Securities shall have been issued and
delivered in accordance with the terms and provisions of such
Debt Securities Indenture.
3. All requisite action necessary to make the Guarantee a
valid, legal and binding obligation of the Company will have been
taken when the Board of Directors of the Company, or an officer
duly authorized thereby, shall have taken such action as may be
necessary to establish the terms of the Guarantee and the
Guarantee shall have been duly executed and delivered by the
parties thereto.
4. All requisite action necessary to make the Subordinated
Debentures valid, legal and binding obligations of the Company
will have been taken when the Board of Directors of the Company,
or an officer duly authorized thereby, shall have taken such
action, pursuant to the terms of the Subordinated Indenture, as
may be necessary to establish the terms of the Subordinated
Debentures, and the Subordinated Debentures shall have been
issued and delivered in accordance with the terms and provisions
of the Subordinated Indenture.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of Texas. As to all matters
of Texas law, we have with your consent relied upon an opinion of
even date herewith addressed to you by Worsham, Forsythe &
Wooldridge, L.L.P. of Dallas, Texas.
We hereby consent to the use 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,
/s/ Thelen Reid & Priest LLP
THELEN REID & PRIEST LLP
Richards, Layton & Finger
A Professional Association
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
August 23, 1999
TXU Gas Company
TXU Gas Capital II
c/o TXU Gas Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Re: TXU Gas Capital II
------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for TXU Gas Company,
a Texas corporation (the "Company"), and TXU Gas Capital II, a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of August
18, 1999 (the "Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on August 18, 1999;
(b) The Trust Agreement of the Trust, dated as of August 18,
1999, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the preferred undivided beneficial interests in the assets of the Trust (each, a
"Preferred Trust Security" and collectively, the "Preferred Trust Securities"),
as proposed to be filed by the Trust, the Company and others with the Securities
and Exchange Commission on or about August 23, 1999;
(d) A form of Amended and Restated Trust Agreement of the
Trust (including Exhibits A, B and D thereto) (the "Trust Agreement"), to be
entered into among the Company, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, filed as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated August
23, 1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are signatories to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Trust Security is to be issued by the Trust (collectively, the
"Securityholders") of a Preferred Trust Securities Certificate in the form
attached as Exhibit D to the Trust Agreement evidencing ownership of such
Preferred Trust Security in the name of such Person and the payment for the
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Preferred Trust Securities are
issued and sold to the Securityholders in accordance with the Trust Agreement
and the Registration Statement. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Trust Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Securityholders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Securityholders may
be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Experts
and Legality" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
Richards, Layton & Finger
A Professional Association
One Rodney Square
P.O.Box 551
Wilmington, Delaware 19899
August 23, 1999
TXU Gas Company
TXU Gas Capital III
c/o TXU Gas Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Re: TXU Gas Capital III
-------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for TXU Gas Company,
a Texas corporation (the "Company"), and TXU Gas Capital III, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of August
18, 1999 (the "Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on August 18, 1999;
(b) The Trust Agreement of the Trust, dated as of August 18,
1999, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the preferred undivided beneficial interests in the assets of the Trust (each, a
"Preferred Trust Security" and collectively, the "Preferred Trust Securities"),
as proposed to be filed by the Trust, the Company and others with the Securities
and Exchange Commission on or about August 23, 1999;
(d) A form of Amended and Restated Trust Agreement of the
Trust (including Exhibits A, B and D thereto) (the "Trust Agreement"), to be
entered into among the Company, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, filed as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated August
23, 1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are signatories to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Trust Security is to be issued by the Trust (collectively, the
"Securityholders") of a Preferred Trust Securities Certificate in the form
attached as Exhibit D to the Trust Agreement evidencing ownership of such
Preferred Trust Security in the name of such Person and the payment for the
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Preferred Trust Securities are
issued and sold to the Securityholders in accordance with the Trust Agreement
and the Registration Statement. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Trust Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Securityholders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Securityholders may
be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Experts
and Legality" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
Richards, Layton & Finger
A Professional Association
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
August 23, 1999
TXU Gas Company
TXU Gas Capital IV
c/o TXU Gas Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Re: TXU Gas Capital IV
------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for TXU Gas Company,
a Texas corporation (the "Company"), and TXU Gas Capital IV, a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of August
18, 1999 (the "Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on August 18, 1999;
(b) The Trust Agreement of the Trust, dated as of August 18,
1999, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the preferred undivided beneficial interests in the assets of the Trust (each, a
"Preferred Trust Security" and collectively, the "Preferred Trust Securities"),
as proposed to be filed by the Trust, the Company and others with the Securities
and Exchange Commission on or about August 23, 1999;
(d) A form of Amended and Restated Trust Agreement of the
Trust (including Exhibits A, B and D thereto) (the "Trust Agreement"), to be
entered into among the Company, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, filed as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated August
23, 1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are signatories to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Trust Security is to be issued by the Trust (collectively, the
"Securityholders") of a Preferred Trust Securities Certificate in the form
attached as Exhibit D to the Trust Agreement evidencing ownership of such
Preferred Trust Security in the name of such Person and the payment for the
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Preferred Trust Securities are
issued and sold to the Securityholders in accordance with the Trust Agreement
and the Registration Statement. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Trust Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Securityholders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Securityholders may
be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Experts
and Legality" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
EXHIBIT 12(b)
TXU GAS COMPANY
(FORMERLY ENSERCH CORPORATION, A WHOLLY-OWNED
SUBSIDIARY OF TEXAS UTILITIES COMPANY) AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED DIVIDENDS
Six Months
Ended
June 30,
1999
----------
EARNINGS:
Net Income (loss) $(21,007)
Add:
Total federal income taxes (6,419)
Fixed charges (see detail below) 38,285
---------
Total earnings (1) $ 10,859
=========
FIXED CHARGES:
Interest expense $ 32,707
Rentals representative of the interest factor 567
Distributions on trust securities of subsidiaries 5,011
---------
Fixed charges deducted from earnings 38,285
Capitalized interest -
---------
Total fixed charges 38,285
Preferred dividends adjusted for pretax
earnings coverage (2) 2,255
---------
Combined fixed charges and preferred dividends $ 40,540
=========
RATIO OF EARNINGS TO FIXED CHARGES (3) 0.28
====
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED DIVIDENDS (4) 0.27
====
<PAGE>
(1) "Earnings" represent the aggregate of (a) net income (loss), (b) income
taxes, and (c) fixed charges deducted from earnings, on a total
enterprise basis. "Fixed Charges" represent interest expense,
distributions on trust securities of subsidiaries, capitalized interest
and the portion of rental expense representative of the interest
factor.
(2) The preferred stock dividend requirements are assumed to be equal to
the pretax earnings which would be required to cover such dividend
requirements. The amount of such pretax earnings required to cover
preferred stock dividends was computed using tax rates for the
applicable period.
(3) For the six months ended June 30, 1999, fixed charges exceeded earnings
by $27.4 million.
(4) For the six months ended June 30, 1999, combined fixed charges and
preferred dividends exceeded earnings by $29.7 million.
EXHIBIT 15
TXU Gas Company:
We have made reviews, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim condensed
consolidated interim financial information of TXU Gas Company, (formerly ENSERCH
Corporation) and subsidiaries (TXU Gas) for the periods ended March 31, 1999 and
1998 and June 30, 1999 and 1998, as indicated in our reports dated May 13, 1999
and August 12, 1999, respectively; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our reports referred to above, which were included in TXU Gas'
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and June
30, 1999, are being incorporated by reference in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Dallas, Texas
August 23, 1999
EXHIBIT 23(A)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
TXU Gas Company, (formerly ENSERCH Corporation), on Form S-3 of our report dated
March 5, 1999, appearing in the TXU Gas Company Annual Report on Form 10-K for
the year ended December 31, 1998 and to the reference to us under the heading
"Experts and Legality" in the Prospectus which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
Dallas, Texas
August 23, 1999
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-0399066
(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)
-----------------
UNSECURED DEBT SECURITIES*
(title of the indenture securities)
- -------------------
* Specific title to be determined in connection with sale of TXU Gas Company
Unsecured Debt 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 Corporation 550 17th Street, N.W.,
Washington, D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(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 17 C.F.R.
Section 229.10(d).
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 13th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
-------------------------------------
Walter N. Gitlin
Vice President
- 2 -
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1999, 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......................................... $ 4,508,742
Interest-bearing balances....................................... 4,425,071
Securities:
Held-to-maturity securities..................................... 836,304
Available-for-sale securities................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell.......................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income............................................ 39,349,679
LESS: Allowance for loan and
lease losses...................................... 603,025
LESS: Allocated transfer risk
reserve........................................... 15,906
Loans and leases, net of unearned
income, allowance, and reserve................................ 38,730,748
Trading Assets.................................................... 1,571,372
Premises and fixed assets (including
capitalized leases)............................................. 685,674
Other real estate owned........................................... 10,331
Investments in unconsolidated subsid-
iaries and associated companies................................. 182,449
Customers' liability to this bank on
acceptances outstanding......................................... 1,184,822
Intangible assets................................................. 1,129,636
Other assets...................................................... 2,632,309
-----------
Total assets...................................................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices............................................. $25,731,036
Noninterest-bearing................................. 10,252,589
Interest-bearing.................................... 15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs................................ 18,756,302
Noninterest-bearing................................. 111,386
Interest-bearing.................................... 18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase ............................ 3,276,362
Demand notes issued to the U.S.
Treasury........................................................ 230,671
Trading liabilities................................................ 1,554,493
Other borrowed money:
With remaining maturity of one year or less...................... 1,154,502
With remaining maturity of more than
one year through three years ................................. 465
With remaining maturity of more than
three years................................................... 31,080
Bank's liability on acceptances
executed and outstanding........................................ 1,185,364
Subordinated notes and debentures.................................. 1,308,000
Other liabilities.................................................. 2,743,590
----------
Total liabilities.................................................. 55,971,865
----------
EQUITY CAPITAL
Common stock...................................................... 1,135,284
Surplus........................................................... 764,443
Undivided profits and capital
reserves........................................................ 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities................................ 44,106
Cumulative foreign currency
translation adjustments......................................... (34,817)
-----------
Total equity capital.............................................. 5,716,713
-----------
Total liabilities and equity capital.............................. $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-0399066
(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)
-----------------
UNSECURED SUBORDINATED DEBT SECURITIES*
(title of the indenture securities)
- -------------------
* Specific title to be determined in connection with sale of TXU Gas Company
Unsecured Subordinated Debt 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 Corporation 550 17th Street, N.W.,
Washington, D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(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 17 C.F.R.
Section 229.10(d).
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 13th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
------------------------------------
Walter N. Gitlin
Vice President
- 2 -
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1999, 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......................................... $ 4,508,742
Interest-bearing balances....................................... 4,425,071
Securities:
Held-to-maturity securities..................................... 836,304
Available-for-sale securities................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell.......................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income............................................. 39,349,679
LESS: Allowance for loan and
lease losses....................................... 603,025
LESS: Allocated transfer risk
reserve............................................ 15,906
Loans and leases, net of unearned
income, allowance, and reserve................................ 38,730,748
Trading Assets.................................................... 1,571,372
Premises and fixed assets (including
capitalized leases)............................................. 685,674
Other real estate owned........................................... 10,331
Investments in unconsolidated subsid-
iaries and associated companies................................. 182,449
Customers' liability to this bank on
acceptances outstanding......................................... 1,184,822
Intangible assets................................................. 1,129,636
Other assets...................................................... 2,632,309
-----------
Total assets...................................................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices............................................. $25,731,036
Noninterest-bearing.................................. 10,252,589
Interest-bearing..................................... 15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs................................ 18,756,302
Noninterest-bearing.................................. 111,386
Interest-bearing..................................... 18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase ............................ 3,276,362
Demand notes issued to the U.S.
Treasury........................................................ 230,671
Trading liabilities............................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less..................... 1,154,502
With remaining maturity of more than
one year through three years ................................. 465
With remaining maturity of more than
three years................................................. 31,080
Bank's liability on acceptances
executed and outstanding........................................ 1,185,364
Subordinated notes and debentures................................. 1,308,000
Other liabilities................................................. 2,743,590
-----------
Total liabilities................................................. 55,971,865
-----------
EQUITY CAPITAL
Common stock...................................................... 1,135,284
Surplus........................................................... 764,443
Undivided profits and capital
reserves........................................................ 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities................................ 44,106
Cumulative foreign currency
translation adjustments......................................... (34,817)
-----------
Total equity capital.............................................. 5,716,713
-----------
Total liabilities and equity capital.............................. $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS CAPITAL II
(Exact name of obligor as specified in its charter)
Texas to be applied for
(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)
-----------------
TXU Gas Capital II Preferred Trust Securities*
(Title of the securities)
- -------------------
* Specific title to be determined in connection with sale of TXU Gas
Capital II Preferred Trust 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 Corporation 550 17th Street, N.W.,
Washington, D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(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 17
C.F.R. Section 229.10(d).
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 13th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
------------------------------------
Walter N. Gitlin
Vice President
- 2 -
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1999, 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......................................... $ 4,508,742
Interest-bearing balances....................................... 4,425,071
Securities:
Held-to-maturity securities..................................... 836,304
Available-for-sale securities................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell.......................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income............................................. 39,349,679
LESS: Allowance for loan and
lease losses....................................... 603,025
LESS: Allocated transfer risk
reserve............................................ 15,906
Loans and leases, net of unearned
income, allowance, and reserve................................ 38,730,748
Trading Assets.................................................... 1,571,372
Premises and fixed assets (including
capitalized leases)............................................. 685,674
Other real estate owned........................................... 10,331
Investments in unconsolidated subsid-
iaries and associated companies................................. 182,449
Customers' liability to this bank on
acceptances outstanding......................................... 1,184,822
Intangible assets................................................. 1,129,636
Other assets...................................................... 2,632,309
-----------
Total assets...................................................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices............................................. $25,731,036
Noninterest-bearing.................................. 10,252,589
Interest-bearing..................................... 15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs.............................. 18,756,302
Noninterest-bearing.................................. 111,386
Interest-bearing..................................... 18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase ............................ 3,276,362
Demand notes issued to the U.S.
Treasury........................................................ 230,671
Trading liabilities............................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less..................... 1,154,502
With remaining maturity of more than
one year through three years ................................. 465
With remaining maturity of more than
three years................................................. 31,080
Bank's liability on acceptances
executed and outstanding........................................ 1,185,364
Subordinated notes and debentures................................. 1,308,000
Other liabilities................................................. 2,743,590
----------
Total liabilities................................................. 55,971,865
----------
EQUITY CAPITAL
- --------------
Common stock...................................................... 1,135,284
Surplus........................................................... 764,443
Undivided profits and capital
reserves........................................................ 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities................................ 44,106
Cumulative foreign currency
translation adjustments......................................... (34,817)
-----------
Total equity capital.............................................. 5,716,713
-----------
Total liabilities and equity capital.............................. $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-0399066
(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)
-----------------
TXU GAS COMPANY GUARANTEE WITH RESPECT TO TXU GAS CAPITAL II PREFERRED TRUST
SECURITIES*
(Title of the securities)
- ----------
* Specific title to be determined in connection with sale of TXU Gas Capital II
Preferred Trust 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 Corporation 550 17th Street, N.W., Washington,
New York Clearing House Association D.C. 20429
New York, N.Y. 10005
(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 17 C.F.R.
ss.229.10(d).
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 13th day of August, 1999.
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 One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1999, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
<S> <C>
Dollar Amounts
ASSETS in Thousands
------ ------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin .......................................... $ 4,508,742
Interest-bearing balances ........................................ 4,425,071
Securities:
Held-to-maturity securities ...................................... 836,304
Available-for-sale securities .................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell ........................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...............................................39,349,679
LESS: Allowance for loan and
lease losses ......................................... 603,025
LESS: Allocated transfer risk
reserve .............................................. 15,906
Loans and leases, net of unearned
income, allowance, and reserve ................................. 38,730,748
Trading Assets ..................................................... 1,571,372
Premises and fixed assets (including
capitalized leases) .............................................. 685,674
Other real estate owned ............................................ 10,331
Investments in unconsolidated subsid-
iaries and associated companies .................................. 182,449
Customers' liability to this bank on
acceptances outstanding .......................................... 1,184,822
Intangible assets .................................................. 1,129,636
Other assets ....................................................... 2,632,309
-----------
Total assets ....................................................... $61,688,578
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices .............................................. $25,731,036
Noninterest-bearing ................................... 10,252,589
Interest-bearing ...................................... 15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ................................. 18,756,302
Noninterest-bearing ................................... 111,386
Interest-bearing ...................................... 18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase ............................. 3,276,362
Demand notes issued to the U.S.
Treasury ........................................................ 230,671
Trading liabilities ............................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less ..................... 1,154,502
With remaining maturity of more than
one year through three years .................................. 465
With remaining maturity of more than
three years ................................................. 31,080
Bank's liability on acceptances
executed and outstanding ........................................ 1,185,364
Subordinated notes and debentures ................................. 1,308,000
Other liabilities ................................................. 2,743,590
-----------
Total liabilities ................................................. 55,971,865
-----------
EQUITY CAPITAL
- --------------
Common stock ...................................................... 1,135,284
Surplus ........................................................... 764,443
Undivided profits and capital
reserves ........................................................ 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities ................................ 44,106
Cumulative foreign currency
translation adjustments ......................................... (34,817)
-----------
Total equity capital .............................................. 5,716,713
-----------
Total liabilities and equity capital .............................. $61,688,578
===========
</TABLE>
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS CAPITAL III
(Exact name of obligor as specified in its charter)
Texas to be applied for
(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)
-----------------
TXU GAS CAPITAL III PREFERRED TRUST SECURITIES*
(Title of the securities)
- ----------
* Specific title to be determined in connection with sale of TXU Gas Capital III
Preferred Trust 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 3 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
New York Clearing House Association D.C. 20429
New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIIATIONS 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 17 C.F.R.
ss.229.10(d).
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 13th day of August, 1999.
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 One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business March 31, 1999, 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 ......................................... $ 4,508,742
Interest-bearing balances ....................................... 4,425,071
Securities:
Held-to-maturity securities ..................................... 836,304
Available-for-sale securities ................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell .......................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...............................................39,349,679
LESS: Allowance for loan and
lease losses ......................................... 603,025
LESS: Allocated transfer risk
reserve .............................................. 15,906
Loans and leases, net of unearned
income, allowance, and reserve ................................ 38,730,748
Trading Assets .................................................... 1,571,372
Premises and fixed assets (including
capitalized leases) ............................................. 685,674
Other real estate owned ........................................... 10,331
Investments in unconsolidated subsid-
iaries and associated companies ................................. 182,449
Customers' liability to this bank on
acceptances outstanding ......................................... 1,184,822
Intangible assets ................................................. 1,129,636
Other assets ...................................................... 2,632,309
-----------
Total assets ...................................................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices ............................................. $25,731,036
Noninterest-bearing ................................. 10,252,589
Interest-bearing .................................... 15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ................................ 18,756,302
Noninterest-bearing ................................. 111,386
Interest-bearing .................................... 18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase ............................. 3,276,362
Demand notes issued to the U.S.
Treasury ........................................................ 230,671
Trading liabilities ............................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less ..................... 1,154,502
With remaining maturity of more than
one year through three years .................................. 465
With remaining maturity of more than
three years ................................................. 31,080
Bank's liability on acceptances
executed and outstanding ........................................ 1,185,364
Subordinated notes and debentures ................................. 1,308,000
Other liabilities ................................................. 2,743,590
----------
Total liabilities ................................................. 55,971,865
==========
EQUITY CAPITAL
- --------------
Common stock ...................................................... 1,135,284
Surplus ........................................................... 764,443
Undivided profits and capital
reserves ........................................................ 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities ................................ 44,106
Cumulative foreign currency
translation adjustments ......................................... (34,817)
-----------
Total equity capital .............................................. 5,716,713
-----------
Total liabilities and equity capital .............................. $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-0399066
(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)
-----------------
TXU GAS COMPANY GUARANTEE WITH RESPECT TO TXU GAS CAPITAL III PREFERRED TRUST
SECURITIES*
(Title of the securities)
- -----------
* Specific title to be determined in connection with sale of TXU Gas Capital III
PreferredTrust 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 Corporation 550 17th Street, N.W., Washington,
New York Clearing House Association D.C. 20429
New York, N.Y. 10005
(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 17 C.F.R.
ss.229.10(d).
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 13th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
----------------------
Walter N. Gitlin
Vice President
-2-
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business March 31, 1999, 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 .......................................... $ 4,508,742
Interest-bearing balances ........................................ 4,425,071
Securities:
Held-to-maturity securities ...................................... 836,304
Available-for-sale securities .................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell ........................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...............................................39,349,679
LESS: Allowance for loan and
lease losses ......................................... 603,025
LESS: Allocated transfer risk
reserve .............................................. 15,906
Loans and leases, net of unearned
income, allowance, and reserve ................................. 38,730,748
Trading Assets ..................................................... 1,571,372
Premises and fixed assets (including
capitalized leases) .............................................. 685,674
Other real estate owned ............................................ 10,331
Investments in unconsolidated subsid-
iaries and associated companies .................................. 182,449
Customers' liability to this bank on
acceptances outstanding .......................................... 1,184,822
Intangible assets .................................................. 1,129,636
Other assets ....................................................... 2,632,309
-----------
Total assets ....................................................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices .............................................. $25,731,036
Noninterest-bearing ....................................10,252,589
Interest-bearing .......................................15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ................................. 18,756,302
Noninterest-bearing .................................... 111,386
Interest-bearing .......................................18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase .............................. 3,276,362
Demand notes issued to the U.S.
Treasury ......................................................... 230,671
Trading liabilities ................................................ 1,554,493
Other borrowed money:
With remaining maturity of one year or less ...................... 1,154,502
With remaining maturity of more than
one year through three years ................................... 465
With remaining maturity of more than
three years .................................................. 31,080
Bank's liability on acceptances
executed and outstanding ......................................... 1,185,364
Subordinated notes and debentures .................................. 1,308,000
Other liabilities .................................................. 2,743,590
----------
Total liabilities .................................................. 55,971,865
==========
EQUITY CAPITAL
- --------------
Common stock ....................................................... 1,135,284
Surplus ............................................................ 764,443
Undivided profits and capital
reserves ......................................................... 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities ................................. 44,106
Cumulative foreign currency
translation adjustments .......................................... (34,817)
-----------
Total equity capital ............................................... 5,716,713
-----------
Total liabilities and equity capital ............................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS CAPITAL IV
(Exact name of obligor as specified in its charter)
Texas to be applied for
(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)
-----------------
TXU GAS CAPITAL IV PREFERRED TRUST SECURITIES*
(Title of the securities)
- --------
* Specific title to be determined in connection with sale of TXU Gas Capital IV
Preferred Trust 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 Corporation 550 17th Street, N.W., Washington,
New York Clearing House Association D.C. 20429
New York, N.Y. 10005
(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 17 C.F.R.
ss.229.10(d).
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 13th day of August, 1999.
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 One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1999, 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 .......................................... $ 4,508,742
Interest-bearing balances ........................................ 4,425,071
Securities:
Held-to-maturity securities ...................................... 836,304
Available-for-sale securities .................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell ........................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...............................................39,349,679
LESS: Allowance for loan and
lease losses ......................................... 603,025
LESS: Allocated transfer risk
reserve .............................................. 15,906
Loans and leases, net of unearned
income, allowance, and reserve ................................. 38,730,748
Trading Assets ..................................................... 1,571,372
Premises and fixed assets (including
capitalized leases) .............................................. 685,674
Other real estate owned ............................................ 10,331
Investments in unconsolidated subsid-
iaries and associated companies .................................. 182,449
Customers' liability to this bank on
acceptances outstanding .......................................... 1,184,822
Intangible assets .................................................. 1,129,636
Other assets ....................................................... 2,632,309
-----------
Total assets ....................................................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices ............................................. $25,731,036
Noninterest-bearing ................................. 10,252,589
Interest-bearing .................................... 15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ................................ 18,756,302
Noninterest-bearing ................................. 111,386
Interest-bearing .................................... 18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase ............................. 3,276,362
Demand notes issued to the U.S.
Treasury ........................................................ 230,671
Trading liabilities ............................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less ..................... 1,154,502
With remaining maturity of more than
one year through three years .................................. 465
With remaining maturity of more than
three years ................................................. 31,080
Bank's liability on acceptances
executed and outstanding ........................................ 1,185,364
Subordinated notes and debentures ................................. 1,308,000
Other liabilities ................................................. 2,743,590
-----------
Total liabilities ................................................. 55,971,865
===========
EQUITY CAPITAL
- --------------
Common stock ..................................................... 1,135,284
Surplus .......................................................... 764,443
Undivided profits and capital
reserves ....................................................... 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities ............................... 44,106
Cumulative foreign currency
translation adjustments ........................................ (34,817)
-----------
Total equity capital ............................................. 5,716,713
-----------
Total liabilities and equity capital ............................. $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
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.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU GAS COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-0399066
(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)
-----------------
TXU GAS COMPANY GUARANTEE WITH RESPECT TO TXU GAS CAPITAL IV PREFERRED TRUST
SECURITIES*
(Title of the securities)
- ----------
* Specific title to be determined in connection with sale of TXU Gas Capital IV
Preferred Trust 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 Corporation 550 17th Street, N.W., Washington,
New York Clearing House Association D.C. 20429
New York, N.Y. 10005
(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 17 C.F.R.
ss.229.10(d).
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 13th day of August, 1999.
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 One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1999, 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 .......................................... $ 4,508,742
Interest-bearing balances ........................................ 4,425,071
Securities:
Held-to-maturity securities ...................................... 836,304
Available-for-sale securities .................................... 4,047,851
Federal funds sold and Securities
purchased under agreements to resell ........................... 1,743,269
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ...............................................39,349,679
LESS: Allowance for loan and
lease losses ......................................... 603,025
LESS: Allocated transfer risk
reserve .............................................. 15,906
Loans and leases, net of unearned
income, allowance, and reserve ................................. 38,730,748
Trading Assets ..................................................... 1,571,372
Premises and fixed assets (including
capitalized leases) .............................................. 685,674
Other real estate owned ............................................ 10,331
Investments in unconsolidated subsid-
iaries and associated companies .................................. 182,449
Customers' liability to this bank on
acceptances outstanding .......................................... 1,184,822
Intangible assets .................................................. 1,129,636
Other assets ....................................................... 2,632,309
-----------
Total assets ....................................................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices .............................................. $25,731,036
Noninterest-bearing ....................................10,252,589
Interest-bearing .......................................15,478,447
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ................................. 18,756,302
Noninterest-bearing .................................... 111,386
Interest-bearing .......................................18,644,916
Federal funds purchased and Securities
sold under agreements to repurchase .............................. 3,276,362
Demand notes issued to the U.S.
Treasury ......................................................... 230,671
Trading liabilities ................................................ 1,554,493
Other borrowed money:
With remaining maturity of one year or less ...................... 1,154,502
With remaining maturity of more than
one year through three years ................................... 465
With remaining maturity of more than
three years .................................................. 31,080
Bank's liability on acceptances
executed and outstanding ......................................... 1,185,364
Subordinated notes and debentures .................................. 1,308,000
Other liabilities .................................................. 2,743,590
----------
Total liabilities .................................................. 55,971,865
==========
EQUITY CAPITAL
- --------------
Common stock ....................................................... 1,135,284
Surplus ............................................................ 764,443
Undivided profits and capital
reserves ......................................................... 3,807,697
Net unrealized holding gains (losses)
on available-for-sale securities ................................. 44,106
Cumulative foreign currency
translation adjustments .......................................... (34,817)
-----------
Total equity capital ............................................... 5,716,713
-----------
Total liabilities and equity capital ............................... $61,688,578
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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.
Thomas A. Renyi )
Alan R. Griffith ) Directors
Gerald L. Hassell )
