TEXAS UTILITIES ELECTRIC CO, S-4/A, 1995-11-07

TEXAS UTILITIES ELECTRIC CO
S-4/A, 1995-11-07
ELECTRIC SERVICES

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Registration Nos. 33-63031 and 33-63031-01

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=========================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________

AMENDMENT NO. 3
<R/>
TO

FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

______________________________________________

TEXAS UTILITIES ELECTRIC COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Texas 4911 75-1837355
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION
ORGANIZATION) CODE NUMBER)

TU ELECTRIC CAPITAL I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware To Be Applied For
(State of incorporation (I.R.S. Employer Identification
or organization) No.)

1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

ROBERT A. WOOLDRIDGE, Esq. PETER B. TINKHAM
Worsham, Forsythe Texas Utilities Electric
& Wooldridge, L.L.P. Company
1601 Bryan Street Secretary
Dallas, Texas 75201 1601 Bryan Street
(214) 979-3000 Dallas, Texas 75201
(214) 812-4600

ROBERT J. REGER, JR., Esq.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
(212) 603-2000

(NAMES AND ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS,
INCLUDING AREA CODES, OF AGENTS FOR SERVICE)

__________________________________

It is respectfully requested that the Commission send copies of
all notices, orders and communications to:
STEPHEN K. WAITE, Esq.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000

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=========================

TEXAS UTILITIES ELECTRIC COMPANY
TU ELECTRIC CAPITAL I
CROSS REFERENCE SHEET

Pursuant to Item 501(b) of Regulation S-K Showing Location in
Prospectus of Items of Form S-4

A. INFORMATION ABOUT THE TRANSACTION

1. Forepart of the Registration Statement Facing Page of
Registration Statement
and Outside Front Cover Page of Cross Reference
Sheet; Outside
Prospectus........................... Front

2. Inside Front and Outside Back Inside Front
Cover Page of Prospectus; Cover
Prospectus..................... Outside Back Cover
Page of Prospectus;
Incorporation of
Cetain Documents by
Reference; Available
Information; Table
of Contents

3. Risk Factors, Ratio of Earnings to Prospectus
Summary; Risk Factors;
Fixed Charges, and Other Listing and
Trading of Preferred
<PAGE>

Information.......................... Securities and
Depositary Shares;
The Company; Summary
Financial
Information

4. Terms of the Transaction............. The Exchange
Offer; Description of the
P r e f e r r e d
Securities; Description of
the Guarantee;
Description of the
Junior Subordinated
Debentures; Certain
United States
Federal Income Tax
Considerations

5. Pro Forma Financial Information..... Not Applicable

6. Material Contacts with the Company
Being Acquired...................... Not Applicable

7. Additional Information Required for
Reoffering by Persons and Parties
Deemed to be Underwriters........... Not Applicable

8. Interests of Named Experts and
Counsel.............................. Experts

9. Disclosure of Commission Position on Part II of the
Registration Statement,
Indemnification for Securities Act Item 22.
Undertakings
Liabilities..........................

B. INFORMATION ABOUT THE REGISTRANT

10. Information with Respect
to S-3 Registrants................... Not Applicable

11. Incorporation of Certain Incorporation
of Certain Documents
Information by Reference............. by Reference

12. Information with Respect to
S-2 or S-3 Registrants............... Not Applicable

13. Not Applicable....................... Not Applicable

14. Information with Respect to
Registrants Other Than S-3 or
S-2 Registrants...................... Not Applicable
<PAGE>

C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED

15. Information with Respect to S-3
Companies............................ Not Applicable

16. Information with Respect to S-2 or
S-3 Companies........................ Not Applicable

17. Information with Respect to Companies
Other Than S-3 or S-2 Companies...... Not Applicable

D. VOTING AND MANAGEMENT INFORMATION

18. Information if Proxies, Consents
or Authorizations Are To Be
Solicited............................ Not Applicable

19. Information if Proxies, Consents
or Authorizations Are Not to
Be Solicited or in an Exchange Incorporation
of Certain
Offer................................ Documents by
Reference
<PAGE>

TEXAS UTILITIES ELECTRIC COMPANY

OFFER TO EXCHANGE FOR ANY OR ALL OF ITS

7,659,300 6,613,700
$1.875 Depositary Shares, $1.805
Depositary Shares,
Series A Series B
each representing 1/4 share of e a c h
representing 1/4 share of
$7.50 Cumulative Preferred Stock $ 7 . 2 2
Cumulative Preferred Stock
CUSIP 882850 44 9 C U S I P
882850 41 5

EITHER

TU ELECTRIC CAPITAL I o r
Cash Only
8.25% Trust Originated Preferred SecuritiesSM (TOPrSSM)
in the amount of
(liquidation preference $25.00 per Preferred Security
$27.50 for each $1.875 Depositary and guaranteed to the extent
set forth herein Share
by Texas Utilities Electric Company) $27.25 for each
$1.805 Depositary Share
plus a cash component of
$2.50 for each $1.875 Depositary Share
$2.25 for each $1.805 Depositary Share

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT,
NEW YORK CITY TIME ON DECEMBER 6, 1995,
UNLESS THE EXCHANGE OFFER IS EXTENDED

Texas Utilities Electric Company (Company) hereby
offers to exchange for any and all of (A) its 7,659,300
outstanding Depositary Shares, Series A, each representing 1/4
share of $7.50 Cumulative Preferred Stock ($1.875 Depositary
Shares) and (B) its 6,613,700 outstanding Depositary Shares,
Series B, each representing 1/4 share of $7.22 Cumulative
Preferred Stock ($1.805 Depositary Shares, hereinafter from time
to time, together with the $1.805 Depositary Shares, referred to
as the Depositary Shares) either 8.25% Trust Originated Preferred
Securities (TOPrS SM) issued by and representing undivided
preferred beneficial interests (Preferred Securities) in the
assets of TU Electric Capital I, a Delaware statutory business
trust (TU Electric Capital) plus an additional cash component, or
cash only, upon the terms and subject to the conditions set forth
<PAGE>

in this Prospectus and the accompanying Letter of Transmittal
with respect to each series of Depositary Shares (each a Letter
of Transmittal), which together with this Prospectus, constitutes
the Exchange Offer.

At the option of the Holder thereof, the Company will
exchange each Depositary Share validly tendered and accepted by
the Company for the following consideration: either Preferred
Securities with a liquidation preference of $25.00 plus a cash
component of $2.50 or cash only in the amount of $27.50 for each
$1.875 Depositary Share; and either Preferred Securities with a
liquidation preference of $25.00 plus a cash component of $2.25
or cash only in the amount of $27.25 for each $1.805 Depositary
Share. In addition, as part of the Exchange Offer, the Holders
(as defined herein) of Depositary Shares accepted for exchange
will be entitled to receive cash equal to the accrued and unpaid
dividends on such shares accumulating after October 1, 1995 to
the Closing Date (as defined herein), in lieu of such dividends,
on their Depositary Shares accepted for exchange, such amount,
without interest (Payment in Lieu of Accumulated Dividends), to
be payable on the Closing Date.

Holders of Depositary Shares may participate in the Exchange
Offer by properly completing and signing the applicable Letter of
Transmittal and tendering their Depositary Shares in accordance
with the instructions contained in THE EXCHANGE OFFER
"Procedures for Tendering" herein and in such Letter of
Transmittal on or prior to the Expiration Date (as defined
herein). A Holder of Depositary Shares who desires to tender
such shares and whose certificates for such shares are not
immediately available, or who cannot comply in a timely manner
with the procedure for book-entry transfer, may tender such
shares by following procedures for guaranteed delivery set forth
in THE EXCHANGE OFFER - "Procedures for Tendering - Guaranteed
Delivery." Tenders of Depositary Shares of either series
pursuant to the Exchange Offer may be withdrawn from the Exchange
Offer at any time on or prior to the Expiration Date with respect
to such series, and, unless the Company has accepted such
Depositary Shares for exchange, at any time after January 5,
1996. Depositary Shares that have been withdrawn may be
retendered prior to the Expiration Date with respect to such
series for exchange for the same or a different form of offered
consideration.

For a description of the other terms of the Exchange Offer,
see THE EXCHANGE OFFER "Terms of the Exchange Offer";
"Expiration Date; Extensions; Amendments; Termination"; and
"Withdrawal of Tenders" herein; and the applicable Letter of
<PAGE>

Transmittal for each series of Depositary Shares. The Company
expressly reserves the right to extend, amend or modify the terms
of the Exchange Offer with respect to the Depositary Shares of
either series, and not to accept for exchange Depositary Shares
of either series at any time on or prior to the Expiration Date
with respect to such series, for any reason, including, without
limitation, if fewer than 100,000 Depositary Shares of such
series would remain outstanding upon acceptance of those tendered
(which condition may be waived by the Company). The Company has
not set a date beyond which the Exchange Offer will not be
extended. See THE EXCHANGE OFFER - "Expiration Date; Extensions;
Amendments; Termination."

SEE RISK FACTORS BEGINNING ON PAGE 14 FOR CERTAIN
INFORMATION RELEVANT TO THE EXCHANGE OFFER AND AN INVESTMENT IN
THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES
DURING AND UNDER WHICH PAYMENT OF DISTRIBUTIONS ON THE PREFERRED
SECURITIES MAY BE DEFERRED AND CERTAIN RELATED FEDERAL INCOME TAX
CONSEQUENCES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION
NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

--------------------------------------

The Dealer Managers for the Exchange Offer are:

MERRILL LYNCH & CO.

GOLDMAN, SACHS & CO.

LEHMAN BROTHERS

SMITH BARNEY INC.

----------------------------------

The date of this Prospectus is November 7, 1995.

SM"Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co.
(cover continued on following page)

<PAGE>

The Company, a Texas corporation, is the owner of the
undivided common beneficial interests in the assets of TU
Electric Capital (Common Securities, together with the Preferred
Securities herein referred to as the Trust Securities). The Bank
of New York and The Bank of New York (Delaware) are the Property
Trustee and the Delaware Trustee, respectively, and three
individuals who are employees of the Company or its affiliates
are the Administrative Trustees of TU Electric Capital. TU
Electric Capital exists for the sole purpose of issuing Trust
Securities to the Company in exchange for, and holding as trust
assets, 8.25% Junior Subordinated Debentures, Series A, due
September 30, 2030, issued by the Company (Junior Subordinated
Debentures) in an aggregate principal amount equal to the
aggregate liquidation preference of the Trust Securities. The
Preferred Securities will have a preference under certain
circumstances with respect to cash distributions and amounts
payable on liquidation, redemption or otherwise over the Common
Securities. See DESCRIPTION OF THE PREFERRED SECURITIES -
"Subordination of Common Securities."

Holders of the Preferred Securities will be entitled to
receive cumulative cash distributions accruing from the date of
original issuance and payable quarterly in arrears on the last
day of March, June, September and December of each year,
commencing December 31, 1995, at the per annum rate of 8.25% of the
liquidation preference amount thereof. Interest on the Junior
Subordinated Debentures is the sole source of income for TU
Electric Capital from which payment of distributions on the
Preferred Securities can be made. The Company has the right to
defer payments of interest on the Junior Subordinated Debentures
by extending the interest payment period thereon at any time for
up to 20 consecutive quarters (each such extended payment period,
an Extension Period), provided that the aggregate interest
payment period, as so extended, may not exceed 20 consecutive
quarterly interest payment periods or extend beyond the maturity
of the Junior Subordinated Debentures. Upon the termination of
any Extension Period and the payment of all amounts then due,
including interest on deferred interest payments, the Company may
elect a new Extension Period, subject to the above requirements.

If interest payments are so deferred, distributions on the
Preferred Securities will also be deferred to such extent.
During an Extension Period, distributions will continue to
accrue, and Holders of Preferred Securities will be required to
accrue income for United States federal income tax purposes.
Cash distributions in arrears will bear interest thereon at the
rate per annum of 8.25% of the liquidation preference amount of
$25 per Preferred Security (to the extent permitted by applicable
law), compounded quarterly. See DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES - "Option to Extend Interest Payment
<PAGE>

Period" and CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
- "Original Issue Discount." During an Extension Period, the
Company may not declare or pay dividends on (other than dividends
paid in shares of Common Stock of the Company) or redeem or
acquire, any of its capital stock, redeem any indebtedness that
is pari passu with the Junior Subordinated Debentures or make any
guarantee payment with respect to the foregoing. Any Extension
Period with respect to payment of interest on the Junior
Subordinated Debentures, other Debt Securities (as defined
herein) or on any similar securities will apply to all such
securities and will also apply to distributions with respect to
the Preferred Securities and all other securities with terms
substantially the same as the Preferred Securities. Based upon
the Company's current financial condition and, in light of the
restriction on payment of dividends on the Company's securities
during an Extension Period, the Company believes that an
extension of a distribution payment period on the Preferred
Securities is currently unlikely and has no current intention to
cause such an extension. See DESCRIPTION OF THE PREFERRED
SECURITIES - "Distributions."

The payment of distributions out of moneys held by TU
Electric Capital and payments on liquidation of TU Electric
Capital or the redemption of Preferred Securities, as set forth
below, are guaranteed by the Company to the extent TU Electric
Capital has sufficient funds available to make such payments
(Guarantee). See DESCRIPTION OF THE GUARANTEE. If the Company
fails to make interest payments on the Junior Subordinated
Debentures held by TU Electric Capital, TU Electric Capital will
have insufficient funds to pay distributions on the Preferred
Securities. The Guarantee does not cover payment of
distributions when TU Electric Capital does not have sufficient
funds to pay such distributions. In such event, the Holders of
Preferred Securities would be required to rely on enforcement of
the rights of TU Electric Capital under the Junior Subordinated
Debentures held by TU Electric Capital. The Company's
obligations under the Guarantee are subordinate and junior in
right of payment to all other liabilities of the Company except
any liabilities that may be made pari passu expressly by their
terms. The Company may organize trusts similar to TU Electric
Capital for the purpose of issuing securities similar to the
Preferred Securities. It is expected that junior subordinated
debentures or other Debt Securities of the Company that are pari
passu with the Junior Subordinated Debentures will be issued in
connection with the issuance of any such securities. Any
extension period with respect to any such junior subordinated
debentures of the Company will apply to the Junior Subordinated
Debentures, any other Debt Securities, any similar securities,
the Preferred Securities and any securities substantially the
same as the Preferred Securities.

<PAGE>

The Preferred Securities are subject to mandatory redemption
upon repayment of the Junior Subordinated Debentures at maturity
or upon their earlier redemption. See DESCRIPTION OF THE
PREFERRED SECURITIES "Redemption Procedures." The Company will
have the option at any time on or after November 1, 2001, upon
not less than 45 days' notice, to redeem the Junior Subordinated
Debentures, in whole or in part. The Company also will have the
right at any time, upon the occurrence of a Tax Event (as defined
herein), to cause the termination of TU Electric Capital and, in
connection therewith, after satisfaction of creditors of TU
Electric Capital, if any, to distribute Junior Subordinated
Debentures to the Holders of Preferred Securities or, under
certain circumstances, to redeem, in whole or in part, the Junior
Subordinated Debentures. Any redemption of the Preferred
Securities and the Common Securities by TU Electric Capital will
be, upon not less than 30 days' nor more than 60 days' notice to
the Holders thereof, in amounts having an aggregate liquidation
preference equal to the aggregate principal of Junior
Subordinated Debentures to be redeemed at a redemption price of
100% of such liquidation preference amount, plus accrued and
unpaid distributions and interest thereon, if any, to the
redemption date. Each class of the Trust Securities will be
redeemed in proportion to the percentage they represent of all
the Trust Securities. See DESCRIPTION OF THE JUNIOR SUBORDINATED
DEBENTURES - "Optional Redemption"; also, for a comparison of the
redemption terms of the Preferred Securities and the Depositary
Shares, see PROSPECTUS SUMMARY - "Comparison of Preferred
Securities and Depositary Shares."

The Junior Subordinated Debentures are subordinated and
junior in right of payment to all Senior Indebtedness (as defined
herein) of the Company. As of September 30, 1995, the Company had
approximately $7.5 billion of principal amount of indebtedness
for borrowed money and capital lease obligations constituting
Senior Indebtedness (as defined herein). See DESCRIPTION OF THE
JUNIOR SUBORDINATED DEBENTURES - "Subordination" and DESCRIPTION
OF THE PREFERRED SECURITIES.

In the event of the liquidation of TU Electric Capital, the
Holders of the Trust Securities will be entitled to receive
Junior Subordinated Debentures in an aggregate principal amount
of $25 for each security or, in certain circumstances, a
liquidation preference of $25 for each security, plus accrued and
unpaid distributions thereon to the date of payment, subject to
certain limitations. See DESCRIPTION OF THE PREFERRED SECURITIES
- "Liquidation Distribution upon Termination."

Application will be made to list the Preferred Securities on
the New York Stock Exchange (NYSE).
<PAGE>

The Depositary Shares are listed and principally traded on
the NYSE. On September 27, 1995, the last full day of trading
prior to the first public announcement of the proposal to make
the Exchange Offer, the closing sales prices of the Depositary
Shares on the NYSE, as reported on the composite tape, were
$24.625 per $1.875 Depositary Share and $24.25 per $1.805
Depositary Share, respectively. On November 6, 1995, the last
full day of trading prior to the commencement of the Exchange
Offer, the closing prices on the NYSE, as reported on the
composite tape, were $25.875 per $1.875 Depositary Share and $25.
50 per $1.805 Depositary Share, respectively. Holders of the
Depositary Shares are urged to obtain current market quotations
for such Depositary Shares. To the extent that the aggregate
market value of the Depositary Shares of either series tendered
and accepted in the Exchange Offer results in the number of
Holders of outstanding Depositary Shares of such series to be
less than 100,000, the Company would be required to delist the
Depositary Shares of such series from the NYSE pursuant to NYSE
rules and regulations and the trading market for untendered
Depositary Shares of such series could be adversely affected.
See LISTING AND TRADING OF PREFERRED SECURITIES AND DEPOSITARY
SHARES.

For United States federal income tax purposes, the exchange
of Depositary Shares for either Preferred Securities and a cash
component or for cash only pursuant to the Exchange Offer will be
a taxable transaction. In addition, the Junior Subordinated
Debentures will be treated as having been issued with original
issue discount (OID) which will require Holders of Preferred
Securities to include their pro rata share of OID in gross income
as it accrues on the Junior Subordinated Debentures in advance of
the receipt of cash. For a discussion of these and other United
States federal income tax considerations relevant to the Exchange
Offer, see CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.

The Preferred Securities constitute a new issue of
securities with no established trading market. While the Company
will apply to have the Preferred Securities listed on the NYSE,
there can be no assurance that an active trading market for the
Preferred Securities will develop or be sustained in the future.

Merrill Lynch & Co., Goldman, Sachs & Co., Lehman Brothers
Inc. and Smith Barney Inc. have been retained as Dealer Managers
to solicit tenders of Depositary Shares pursuant to the Exchange
Offer. See THE EXCHANGE OFFER - "Dealer Managers." The Dealer
Managers may receive additional compensation if they also perform
services as a Soliciting Dealer (as defined herein). See the
next paragraph and FEES AND EXPENSES; TRANSFER TAXES.

<PAGE>

Subject to the receipt of a properly completed and duly
executed Notice of Solicited Tenders as described herein, the
Company will pay to any Soliciting Dealer a solicitation fee of
$.50 per Depositary Share validly tendered, accepted by the
Company and exchanged for a Preferred Security plus cash or $.375
per Depositary Share validly tendered, accepted by the Company
and exchanged for cash only, in each case pursuant to the
Exchange Offer. See FEES AND EXPENSES; TRANSFER TAXES.

D.F. King & Co., Inc. has been retained to act as
Information Agent and Chemical Mellon Shareholder Services,
L.L.C. has been retained to act as Exchange Agent to assist with
the Exchange Offer.

Questions and requests for assistance may be directed to the
Dealer Managers or the Information Agent as set forth on the back
cover of this Prospectus. Requests for additional copies of this
Prospectus, any Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to the Information Agent.

TABLE OF CONTENTS

Page
----

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . 4

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . 4

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . 6

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . 14

THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . 18

TU ELECTRIC CAPITAL . . . . . . . . . . . . . . . . . . . . . 18

SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . . . 19

RATE PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . 20

THE EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . 21

LISTING AND TRADING OF PREFERRED SECURITIES AND DEPOSITARY
SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

FEES AND EXPENSES; TRANSFER TAXES . . . . . . . . . . . . . . 29

DESCRIPTION OF THE PREFERRED SECURITIES . . . . . . . . . . . 30
<PAGE>

DESCRIPTION OF THE GUARANTEE . . . . . . . . . . . . . . . . 39

DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES . . . . . . 41

DESCRIPTION OF CERTAIN TERMS OF THE DEPOSITARY SHARES . . . . 50

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES . . . . 51

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

LEGALITY . . . . . . . . . . . . . . . . . . . . . . . . . . 55

____________________

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE EXCHANGE OFFER,
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY TU ELECTRIC CAPITAL, THE COMPANY, THE
TRUSTEES OR THE DEALER MANAGERS. NEITHER TU ELECTRIC CAPITAL NOR
THE COMPANY IS AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF
THE EXCHANGE OFFER IS NOT IN COMPLIANCE WITH APPLICABLE LAW. IF
TU ELECTRIC CAPITAL OR THE COMPANY BECOMES AWARE OF ANY
JURISDICTION IN WHICH THE MAKING OF THE EXCHANGE OFFER WOULD NOT
BE IN COMPLIANCE WITH APPLICABLE LAW, TU ELECTRIC CAPITAL AND THE
COMPANY WILL MAKE A GOOD FAITH EFFORT TO COMPLY WITH SUCH LAW.
IF, AFTER SUCH GOOD FAITH EFFORT, TU ELECTRIC CAPITAL AND THE
COMPANY CANNOT COMPLY WITH ANY SUCH LAW, THE EXCHANGE OFFER WILL
NOT BE MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF
OF) HOLDERS RESIDING IN SUCH JURISDICTIONS. IN ANY JURISDICTION
WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE EXCHANGE
OFFER TO BE MADE BY OR THROUGH A LICENSED BROKER OR DEALER, THE
EXCHANGE OFFER IS BEING MADE ON BEHALF OF TU ELECTRIC CAPITAL AND
THE COMPANY BY THE DEALER MANAGERS OR ONE OR MORE REGISTERED
BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF TU ELECTRIC
CAPITAL OR THE COMPANY SINCE THE DATE HEREOF.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company under File No.
0-11442 with the Securities and Exchange Commission (Commission)
pursuant to the Securities Exchange Act of 1934, as amended (1934
Act), are incorporated herein by reference:

1. Annual Report on Form 10-K for the year ended
December 31, 1994 (1994 10-K).
<PAGE>

2. Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 and June 30, 1995.

3. Current Reports on Form 8-K, dated October 17, 1995
and October 26, 1995.

All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and prior to
the termination of the offering hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. The documents
which are incorporated by reference in this Prospectus are
sometimes hereinafter referred to as the "Incorporated
Documents."

Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.

THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO
EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS
REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS
PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS
(UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO PETER B.
TINKHAM, SECRETARY, TEXAS UTILITIES ELECTRIC COMPANY, 1601 BRYAN
STREET, DALLAS, TEXAS 75201, TELEPHONE NUMBER (214) 812-4600.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of
the 1934 Act and in accordance therewith files reports and other
information with the Commission. Such reports and other
information filed by the Company can be inspected and copied at
the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison, Suite 1400,
Chicago, Illinois 60661; and New York Regional Office, 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. The Depositary Shares are listed
on the NYSE, where reports and other information concerning the
Company may be inspected.
<PAGE>

Securityholders of the Company may obtain, upon request,
copies of an Annual Report on Form 10-K containing financial
statements as of the end of the most recent fiscal year audited
and reported upon (with an opinion expressed) by independent
auditors.

No separate financial statements of TU Electric Capital are
included herein. The Company considers that such financial
statements would not be material to Holders of the Preferred
Securities because the Company is a reporting company under the
Exchange Act and TU Electric Capital has no independent
operations, but exists for the sole purpose of issuing the Trust
SecuritiesandholdingastrustassetstheJuniorSubordinatedDebentures.

TU Electric Capital will not file separate reports under the
1934 Act. The obligations of the Company under the Junior
Subordinated Debentures to pay principal and interest, and the
obligations of the Company under the Junior Subordinated
Debentures and pursuant to the Trust Agreement to pay amounts
equal to all expenses of TU Electric Capital, together with the
Guarantee and the rights of the Holders of Preferred Securities
to directly enforce the Company's obligations with respect to the
Junior Subordinated Debentures, constitute a full and
unconditional guarantee by the Company of payments due on the
Preferred Securities. See DESCRIPTION OF THE JUNIOR SUBORDINATED
DEBENTURES - "Additional Interest" and DESCRIPTION OF THE
GUARANTEE - "Events of Default."

PROSPECTUS SUMMARY

The following is a summary of certain information contained
herein and should be read in conjunction with such information
contained elsewhere in this Prospectus and is subject to and
qualified by reference to such information. Capitalized terms
used herein have the respective meanings ascribed to them
elsewhere in this Prospectus.

THE COMPANY

The Company was incorporated under the laws of Texas in 1982
and is an electric utility engaged in the generation, purchase,
transmission, distribution and sale of electric energy wholly
within the state of Texas. The principal executive offices of
the Company are located at Energy Plaza, 1601 Bryan Street,
Dallas, Texas 75201; and the telephone number is (214) 812-4600.

TU ELECTRIC CAPITAL

TU Electric Capital is a Delaware statutory business trust
formed for the exclusive purposes of (i) issuing the Preferred
Securities and Common Securities representing undivided
beneficial interests in the assets of TU Electric Capital, (ii)
holding as trust assets the Junior Subordinated Debentures and
(iii) engaging in only those other activities necessary or
<PAGE>

incidental thereto. Upon issuance of the Preferred Securities in
exchange for Depositary Shares, the Holders thereof will own all
of the issued and outstanding Preferred Securities. The Company
has agreed to acquire Common Securities in an amount equal to at
least 3% of the total capital of TU Electric Capital and will own
all of the issued and outstanding Common Securities.

THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

The purpose of the Exchange Offer is to refinance with the
Preferred Securities or repurchase the Depositary Shares and to
achieve certain tax efficiencies for the Company while preserving
the Company's flexibility with respect to future financings. The
Company expects to finance cash purchases of Depositary Shares
pursuant to the Exchange Offer with the proceeds of an offer of
securities similar to the Preferred Securities in a separate
transaction. This refinancing will permit the Company to deduct
interest payable on the Junior Subordinated Debentures (and any
similar debt issued in connection with the aforementioned
financing) for United States federal income tax purposes.
Dividends payable on the Depositary Shares are not tax deductible
by the Company. See THE EXCHANGE OFFER - "Purpose of the
Exchange Offer." While dividends on the Depositary Shares are
eligible for the dividends received deduction for corporate
Holders, distributions on the Preferred Securities will not be
eligible for the dividends received deduction for corporate
Holders. The dividends received deduction is not available to
individual, non-corporate Holders of either Preferred Securities
or Depositary Shares. See "Comparison of Preferred Securities
and Depositary Shares."

TERMS OF THE EXCHANGE OFFER

EXPIRATION DATE; WITHDRAWALS
<PAGE>

Upon the terms and subject to the conditions of the Exchange
Offer, the Company intends to accept for exchange any and all of
the Depositary Shares validly tendered and not withdrawn prior to
12 midnight, New York City time, on December 6, 1995, or if the
Exchange Offer is extended with respect to either series of
Depositary Shares by the Company, in its sole discretion, the
latest date and time to which the Exchange Offer with respect to
such series has been extended (with respect to each such series,
the Expiration Date). Tenders of Depositary Shares pursuant to
the Exchange Offer may be withdrawn at any time prior to the
applicable Expiration Date and, unless accepted for exchange by
the Company, may be withdrawn at any time after January 5, 1996.
Depositary Shares that have been withdrawn may be retendered for
exchange for the same or a different form of offered
consideration. See THE EXCHANGE OFFER - "Withdrawal of Tenders";
"Expiration Date; Extensions; Amendments; Termination."

EXTENSIONS; AMENDMENTS; TERMINATION

The Company expressly reserves the right, in its sole
discretion, to (i) extend, amend or modify the terms of the
Exchange Offer with respect to either series of Depositary Shares
in any manner and (ii) withdraw or terminate the Exchange Offer
with respect to such series and not accept for exchange any
Depositary Shares, at any time on or prior to the Expiration Date
with respect to such series for any reason, including (without
limitation) if fewer than 100,000 Depositary Shares of such
series would remain outstanding upon acceptance of those tendered
(which condition may be waived by the Company). The Company may
therefore amend the annual distribution rate and/or the amount of
the cash component to be paid upon the exchange of Preferred
Securities for Depositary Shares and may independently change the
amount of cash only to be paid for each Depositary Share, in each
case, with respect to any or both series of Depositary Shares.
The Company has not set a date beyond which the Exchange Offer
with respect to either series of Depositary Shares will not be
extended. See THE EXCHANGE OFFER - "Expiration Date; Extensions;
Amendments; Termination."

PROCEDURES FOR TENDERING

Each Holder of Depositary Shares wishing to participate in
the Exchange Offer must (i) properly complete and sign the
applicable Letter of Transmittal with respect to Depositary
Shares of each series to be tendered or a facsimile thereof (all
references in this Prospectus to a Letter of Transmittal shall be
deemed to include a facsimile thereof) in accordance with the
instructions contained herein and in such Letter of Transmittal,
together with any required signature guarantees, and deliver the
<PAGE>

same to Chemical Mellon Shareholder Services, L.L.C., as Exchange
Agent, on or prior to the Expiration Date and either (a)
certificates for the Depositary Shares must be received by the
Exchange Agent at such address or (b) book-entry transfer, as
described herein, and a confirmation of such book-entry transfer
must be received by the Exchange Agent, in each case on or prior
to the Expiration Date or (ii) comply with the guaranteed
delivery procedures described herein. See THE EXCHANGE OFFER
"Procedures for Tendering."

LETTERS OF TRANSMITTAL, CERTIFICATES FOR DEPOSITARY SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE
EXCHANGE AGENT NOT TO THE COMPANY, THE EXCHANGE AGENT, THE DEALER
MANAGERS OR THE INFORMATION AGENT.

Special Procedure for Beneficial Owners

Any beneficial owner whose Depositary Shares are registered
in the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender such Depositary Shares
should contact such registered Holder promptly and instruct such
registered Holder to tender on such beneficial owner's behalf.
If, however, such beneficial owner wishes to tender on its own
behalf, such owner must, prior to completing and executing a
Letter of Transmittal and delivering its Depositary Shares,
either make appropriate arrangements to register ownership of the
Depositary Shares in such owner's name or obtain a properly
completed stock power from the registered Holder. The transfer
of registered ownership may take considerable time and may not be
able to be completed on or prior to the Expiration Date. See THE
EXCHANGE OFFER - "Procedures for Tendering."

GUARANTEED DELIVERY PROCEDURES

If a Holder desires to accept the Exchange Offer and time
will not permit a Letter of Transmittal or certificates for
Depositary Shares to reach the Exchange Agent on or prior to the
Expiration Date or the procedure for book-entry transfer cannot
be completed on a timely basis, a tender may be effected in
accordance with the guaranteed delivery procedures set forth in
THE EXCHANGE OFFER -"Procedures for Tendering -Guaranteed
Delivery."

ACCEPTANCE OF SHARES

thereof promptly after the termination or withdrawal of the
Exchange Offer with respect to such Depositary Shares) at any
time on or prior to the Expiration Date for any reason including
(without limitation) if fewer than 100,000 Depositary Shares of
such series would remain outstanding upon acceptance of those
tendered (which condition may be waived by the Company). See THE
EXCHANGE OFFER -"Acceptance of Depositary Shares; Delivery of
Preferred Securities" and "Expiration Date; Extensions;
Amendments; Termination."

All Depositary Shares not accepted pursuant to the Exchange
Offer will be returned to the tendering Holders at the Company's
expense as promptly as practicable following the Expiration Date.

All Depositary Shares accepted pursuant to the Exchange
Offer by the Company will be retired and canceled.

DELIVERY OF PREFERRED SECURITIES

Subject to the terms and conditions of the Exchange Offer,
the delivery of the Preferred Securities will occur and cash
payments will be made as promptly as practicable on a settlement
date with respect to each series (Closing Date) following the
Expiration Date with respect to such series. See THE EXCHANGE
OFFER - "Acceptance of Depositary Shares; Delivery of Preferred
Securities" and "Expiration Date; Extensions; Amendments;
Termination."

UNTENDERED SHARES

DEALER MANAGERS MARKET ACTIVITY

The Dealer Managers currently plan to make a market in the
Preferred Securities following the completion of the Exchange
Offer and may buy and sell the Preferred Securities on a "when
and if issued" basis prior to the completion of the Exchange
Offer. However, there can be no assurance that the Dealer
Managers will engage in such activities or that any active market
in the Preferred Securities will develop or be maintained.

EXCHANGE AGENT AND INFORMATION AGENT

Chemical Mellon Shareholder Services, L.L.C. has been
appointed as Exchange Agent in connection with the Exchange
Offer. Questions and requests for assistance, requests for
<PAGE>

additional copies of this Prospectus or of the Letter of
Transmittal and requests for Notices of Guaranteed Delivery
should be directed to D.F. King & Co., Inc., which has been
retained by the Company to act as Information Agent for the
Exchange Offer. The addresses and telephone numbers of the
Exchange Agent and the Information Agent are set forth in THE
EXCHANGE OFFER - "Exchange Agent and Information Agent" and on
the outside back cover of this Prospectus.

DEALER MANAGERS

Merrill Lynch & Co., Goldman, Sachs & Co., Lehman Brothers
Inc. and Smith Barney Inc. have been retained as Dealer Managers
in connection with the Exchange Offer. Questions with respect to
the Exchange Offer may be directed to Merrill Lynch & Co. at
(212) 236-4565 (collect), to Goldman, Sachs & Co. at (800) 828-
3182, to Lehman Brothers Inc. at (800) 438-3242 and to Smith
Barney Inc. at (800) 813-3754. For information regarding fees
payable to the Dealer Managers and Soliciting Dealers (as defined
herein), see FEES AND EXPENSES; TRANSFER TAXES.

DESCRIPTION OF PREFERRED SECURITIES

The Preferred Securities are undivided preferred beneficial
interests in the assets of TU Electric Capital and will have a
preference, under certain circumstances, with respect to cash
distributions and amounts payable on liquidation, redemption or
otherwise over the trust interests represented by the Common
Securities issued by TU Electric Capital.

Holders of the Preferred Securities will be entitled to
receive cumulative cash distributions accruing from the date of
original issuance and payable quarterly in arrears on the last
day of March, June, September and December of each year,
commencing December 31, 1995, at the per annum rate of 8.25% of the
liquidation preference amount thereof to the persons in whose
names the Preferred Securities are registered at the close of
business on the relevant record dates. Such distributions will
originally accrue from, and include, the Closing Date and will
accrue to, and include, the first distribution payment date, and
thereafter will accrue from, and exclude, the last distribution
payment date through which distributions have been paid. In the
event that any date on which a distribution is payable on the
Preferred Securities is not a Business Day (as defined herein),
then such distribution will be made on the next succeeding
Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made
<PAGE>

on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.

TU Electric Capital will hold Junior Subordinated Debentures
in an aggregate principal amount equal to the liquidation
preference of the Trust Securities. The Junior Subordinated
Debentures are unsecured subordinated debt securities issued
under an Indenture dated as of December 1, 1995, between the
Company and The Bank of New York, as Trustee (Indenture). TU
Electric Capital will use interest payments on the Junior
Subordinated Debentures to make distributions on the Preferred
Securities. The Junior Subordinated Debentures will be
subordinate to all Senior Indebtedness of the Company but are
senior to all capital stock of the Company.

The Company has the right to defer payments of interest on
the Junior Subordinated Debentures during Extension Periods of up
to 20 consecutive quarters, provided that no single distribution
payment period, as extended, may exceed 20 consecutive quarterly
interest payment periods or extend beyond the maturity of the
Junior Subordinated Debentures. Distributions on the Preferred
Securities will accrue with interest, compounded quarterly, but
will not be payable, during an Extension Period. The Company may
prepay at any time all or any portion of the interest accrued
during an Extension Period. Based upon the Company's current
financial condition and, in light of the restriction on payment
of dividends during an Extension Period, the Company believes
that an extension of a distribution payment period on the
Preferred Securities is unlikely and has no current intention to
extend such a distribution payment period. Upon the termination
of any Extension Period and the payment of all amounts then due,
the Company may elect another Extension Period. The Company will
give TU Electric Capital and the Debenture 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 the NYSE or other applicable self-
regulatory organization of such record date and will cause the
Trust to send notice of such election to the Holders of Preferred
Securities.

If and to the extent the Company makes interest payments on
the Junior Subordinated Debentures deposited in TU Electric
Capital as trust assets, the Property Trustee is obligated to
make distributions promptly on the Preferred Securities. The
payment of distributions on the Preferred Securities and payments
on liquidation of TU Electric Capital and the redemption of
Preferred Securities are guaranteed by the Company if and to the
extent that TU Electric Capital has funds available therefor.

<PAGE>

The Junior Subordinated Debentures are redeemable, in whole
or in part, on or after November 1, 2001, or at any time upon the
occurrence of a Tax Event, at the option of the Company. Upon
redemption of the Junior Subordinated Debentures, the Preferred
Securities will be redeemed.

Upon the occurrence and during the continuation of a Tax
Event arising from a change in law or a change in legal
interpretation or other specified circumstance, TU Electric
Capital shall, unless the Junior Subordinated Debentures are
redeemed in the limited circumstances described below and subject
to certain other limited exceptions, be terminated, with the
result that after the satisfaction of creditors of TU Electric
Capital, if any, the Junior Subordinated Debentures will be
distributed to the Holders of the Preferred Securities and the
Common Securities on a pro rata basis, in lieu of any cash
distribution. In the case of a Tax Event, the Company will have
the right in certain circumstances to redeem the Junior
Subordinated Debentures at any time, in which event TU Electric
Capital will redeem the Trust Securities on a pro rata basis to
the same extent as the Junior Subordinated Debentures are
redeemed. If the Junior Subordinated Debentures are distributed
to the Holders of the Preferred Securities, the Company will use
its best efforts to have the Junior Subordinated Debentures
listed on the New York Stock Exchange or on such other exchange
as the Preferred Securities are then listed. See DESCRIPTION OF
THE PREFERRED SECURITIES - "Tax Event Redemption or
Distribution."

The Company will guarantee payment, where applicable, of
accrued and unpaid distributions, the redemption price and
amounts due upon liquidation, to the extent TU Electric Capital
has funds available therefor.

The Trust Agreement (as defined herein) provides that the
Company shall pay for all debts and obligations (other than with
respect to the Trust Securities) and all costs and expenses of TU
Electric Capital, including any taxes and all costs and expenses
with respect thereto, to which TU Electric Capital may become
subject, except for United States withholding taxes.

No Sinking Fund will be established for the benefit of the
Preferred Securities.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The exchange of Depositary Shares either for Preferred
Securities plus a cash component or for cash alone pursuant to
the Exchange Offer will be a taxable transaction. For further
discussion of this and other federal income tax matters,
including the treatment of distributions with respect to the
Preferred Securities as Original Issue Discount see CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
<PAGE>

COMPARISON OF PREFERRED SECURITIES AND DEPOSITARY SHARES

The following is a brief summary of certain terms of the
Preferred Securities and Depositary Shares. For a more complete
description of the Preferred Securities, see DESCRIPTION OF THE
PREFERRED SECURITIES; and for additional information about the
Depositary Shares, see DESCRIPTION OF CERTAIN TERMS OF THE
DEPOSITARY SHARES.

PREFERRED SECURITIES DEPOSITARY
SHARES
-------------------- ----------
------

Issuer.............. TU Electric Capital T h e
Company

Distribution/Dividend
Rate................ 8.25% per annum payable in equal
Dividend, payable first quarterly installments,
in arrears, calendar day of April, on the
last calendar day of March, July, October and
June, September and December (each
January of each year,
a Distribution Payment Date) and out of
funds legally
accruing originally from, and available
therefor, when,
including, the date of issuance as and if
declared by the
thereof to, and including, the first
Company's Board of Dierctors,
Distribution Payment Date, and there- a t
the rate of $1.875 with
after from, and excluding, the last
respect to the $1.875
Distribution Payment Date through Depositary
Shares and $1.805
which distributions have been paid, with
respect to the $1.805
subject to the Company's right to Depositary
Shares.
elect, from time to time, Extension
Periods, each of which may not Dividends
are cumulative.
exceed 20 consecutive quarterly
Accumulated unpaid dividends
distribution payment periods. do not bear
interest. While
During any Extension Period (to n o
dividends are required to
<PAGE>

the extent permitted by law), be paid and
such payment could
distributions would continue to b e
deferred indefinitely, all
accrue, with interest thereon dividends to
date have been
compounded quarterly and would be paid when
due.
due and payable on the last Business
Day of the Extension Period.

Redemption.......... Upon redemption of the Junior
Reedemable at the option of
Subordinated Debentures, which may
Company, in whole or in part,
be redeemed on or after November 1, on or
after August 1, 2001
2001, at the option of the Company, with
respect to the $1.875
in whole or in part, a like amount of
Depositary Shares and
Trust Securities will be redeemed on
November 1, 2001 with respect
PREFERRED SECURITIES DEPOSITARY
SHARES
-------------------- ----------
-------

a pro rata basis as between the two t o
the $1.805 Depositary
classes, upon not less than 30 nor Shares on
not less than 20
more than 60 days' notice, at 100% of days'
notice, at $25.00 per
the liquidation preference amount of
share, plus accrued and unpaid
the Preferred Securities redeemed p l u s
accrued and unpaid
plus accrued distributions and unpaid
dividends, if any, to the
interest thereon, if any, to the redemption
date.
redemption date.

Tax Event
Distribution
or Redemption.... Upon occurrence of a Tax Event, after N o
comparable provision.
satisfaction of creditors of TU
Electric Capital, if any, distribution
of Junior Subordinated Debentures will
be made to Holders or, in certain
<PAGE>

circumstances at the option of the
Company, may be redeemed in whole or
in part. In such event, a like amount
of Preferred Securities would be redeemed.

Maturity Date...... Subject to mandatory redemption on the N o
maturity date and not
maturity date of the Junior Subordi-
subject to mandatory
nated Debentures, September 30, 2030.
redemption.

Subordination...... Junior Subordinated Debentures will
Subordinated to claims of
be subordinated to all existing and
creditors of the Company,
future Senior Indebtedness of the including
Holders of the
Company and senior to all capital Comany's
outstanding Senior
stock of the Company, including the
Indebtedness and other Debt
Depositary Shares. As of September
Securities and the Junior
30, 1995, approximately $7.5 billion
Subordinated Debentures,
of such Senior Indebtedness was out- pari
passu as to dividends
standing. Payments on the Preferred a n d
liquidation preference
Securities are fully and uncondi- with all
other Preferred
tionally guaranteed by the Company Stock of
the Company and
to the extent of funds available to
senior to the Common Stock
TU Electric Capital. The obligations o f
the Company.
of the Company on the Guarantee are
subordinated to all Senior Indebted-
ness. The Trust Agreement provides
that the Company shall pay for all
debts and obligations (other than with
respect to the Trust Securities) and
all costs and expenses of TU Electric
Capital, including any income taxes,
duties and other governmental charges,
and all costs and expenses with respect
thereto, to which TU Electric Capital
may become subject, except for United
States withholding taxes.
<PAGE>

PREFERRED SECURITIES DEPOSITARY
SHARES
-------------------- ----------
-------

Listing............ Application will be made to list the T h e
Depositary Shares are
Preferred Securities on the NYSE. listed on
the NYSE. How-
ever, see
LISTING AND
TRADING OF
PREFERRED
SECURITIES
AND DEPOSITARY
SHARES.

Dividends Received
Deduction.......... Distributions will not be eligible
Dividends are eligible for
for the dividends received deduction t h e
dividends received
for any Holders. deduction
for corporate
Holders.
The dividends
received
deduction is not
available to
individual,
n o n -
corporate Holders.

Voting Rights/
Enforcement........ Subject to the Company's right to If any
four full quarterly
extend payment as described under dividends
on any class of
DESCRIPTION OF THE PREFERRED t h e
Company's preferred
SECURITIES - "Distributions." s t o c k ,
including the
Holders will have the right to cumulative
preferred stock
receive distributions as and when underlying
the Depositary
due but have only limited voting Shares,
are in default, the
rights, exercisable in the event of
Holders of all preferred
<PAGE>

a proposed change in the terms of stock,
including the
the Preferred Securities or with Holders of
the Depositary
respect to certain actions following
Shares, will become
an Event of Default and selection of
entitled, voting as one
Successor Trustees. The Property class, to
elect a majority
Trustee has the power to exercise of the
Board of Directors.
all rights under the Indenture with When
entitled to vote, each
respect to the Junior Subordinated
Holder of Depositary Shares
Debentures and is also authorized shall have
one quarter (1/4)
to enforce the Guarantee on behalf o f
one vote for each share
of holders of the Preferred held of
record by such
Securities. The holders of the Holder.
Preferred Securities will have the
right to direct the Property Trustee
with respect to certain matters
under the Trust Agreement and the
Guarantee and to take action directly
in certain circumstances to enforce
their rights thereunder.

RISK FACTORS

None of TU Electric Capital, its Trustees, the Company or
the Company's Board of Directors makes any recommendation to
Holders of Depositary Shares as to whether to tender all or any
shares of Depositary Shares in the Exchange Offer or to elect to
receive as consideration for any Depositary Shares tendered
either Preferred Securities plus a cash component or cash only.
Holders of Depositary Shares should carefully consider the
following risk factors with respect to the Exchange Offer and the
Preferred Securities:

EXCHANGE IS TAXABLE EVENT

The exchange of Depositary Shares for either Preferred
Securities and a cash component or for cash only pursuant to the
Exchange Offer will be a taxable event. Accordingly, in the
event of an exchange for Preferred Securities and cash, gain or
loss will be recognized in an amount equal to the difference
between the fair market value of the Preferred Securities
received in the exchange plus the cash received in the exchange,
including the Payment in Lieu of Accumulated Dividends, and the
exchanging shareholder's tax basis in the Depositary Shares
<PAGE>

surrendered. In the event of an exchange for cash only, gain or
loss will be recognized in an amount equal to the difference
between the cash received and the shareholder's tax basis in the
Depositary Shares surrendered. See CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES. Exchanging Holders who elect to receive
Preferred Securities and who have a taxable gain could incur a
tax liability that exceeds the amount of cash received in the
exchange. All Holders of Depositary Shares are advised to
consult their own tax advisors regarding the federal, state,
local and other tax consequences of the exchange of Preferred
Securities for Depositary Shares.

DEPENDENCE OF TU ELECTRIC CAPITAL ON THE COMPANY FOR FUNDS;
SUBORDINATION OF GUARANTEE AND JUNIOR SUBORDINATED DEBENTURES

The ability of TU Electric Capital to pay amounts due on the
Preferred Securities is solely dependent upon the Company making
payments on the Junior Subordinated Debentures as and when
required.

The Company's obligations under the Guarantee are
subordinated and junior in right of payment to all other
liabilities of the Company, except any liabilities that may be
made pari passu expressly by their terms. The obligations of the
Company under the Junior Subordinated Debentures are subordinated
and junior in right of payment to Senior Indebtedness of the
Company. As of June 30, 1995, Senior Indebtedness of the Company
aggregated approximately $7.5 billion. There are no terms of
the Preferred Securities, the Junior Subordinated Debentures or
the Guarantee that limit the Company's ability to incur
additional indebtedness, including indebtedness that would rank
senior to the Junior Subordinated Debentures and the Guarantee.
See DESCRIPTION OF THE GUARANTEE - "Status of the Guarantee",
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES -
"Subordination" and PROSPECTUS SUMMARY -"Comparison of Preferred
Securities and Depositary Shares."

PAYMENT DELAY UPON EXERCISE OF OPTION TO EXTEND INTEREST PAYMENT
PERIOD

The Company has the right under the Indenture to extend the
interest payment period from time to time on the Junior
Subordinated Debentures, for a period not exceeding 20
consecutive quarters. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Company may
select an additional Extension Period, subject to the
requirements described herein. During any such Extension Period,
quarterly distributions on the Preferred Securities would be
deferred (but would continue to accrue with interest thereon
compounded quarterly) by TU Electric Capital. In the event that
the Company exercises this right, during the Extension Period the
Company may not declare or pay dividends or distributions (other
<PAGE>

than dividends or distributions in Common Stock of the Company)
on, or redeem, purchase, acquire, or make a liquidation payment
with respect to any of its capital stock, redeem any indebtedness
that is pari passu with the Junior Subordinated Debentures or
make any guarantee payment with respect to the foregoing. 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 may not exceed 20 consecutive quarters and
that such extended interest payment period may not extend beyond
the maturity date of the Junior Subordinated Debentures. Any
extension period with respect to payment of interest on the
Junior Subordinated Debentures, other Debt Securities or on any
similar securities will apply to all such securities and will
also apply to distributions with respect to the Preferred
Securities and all other securities with terms substantially the
same as the Preferred Securities. If the Company should
determine to exercise its extension right in the future, the
market price of the Preferred Securities is likely to be
affected. Based upon the Company's current financial condition
and, in light of the restriction on payment of dividends during
an Extension Period, TU Electric Capital and the Company believe
that such an extension of an interest payment period on the
Junior Subordinated Debentures is unlikely to occur. See
DESCRIPTION OF THE PREFERRED SECURITIES "Distributions" and
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES "Option to
Extend Interest Payment Period."

ADVERSE TAX CONSEQUENCES OF EXTENSION OF INTEREST PAYMENT PERIOD;
OID

Because the Company has the right to extend the interest
payment period for the Junior Subordinated Debentures, the Junior
Subordinated Debentures will be treated as having been issued
with OID for United States federal income tax purposes. As a
result, Holders of Preferred Securities will be required to
include in their gross income distributions with respect to the
Preferred Securities as they accrue, rather than when they are
paid, regardless of the Holders' regular method of accounting.
OID on the Preferred Securities will be treated as interest and
will generally be equal to the amount of stated distributions
accruing on the Preferred Securities each year. During an
Extension Period, a Holder of Preferred Securities that is
subject to United States federal income tax would be required to
continue to include in gross income an amount of OID in respect
of the distributions accruing on the Preferred Securities for
United States federal income tax purposes in advance of the
receipt of cash regardless of such Holder's regular method of
accounting. See CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES - "Original Issue Discount." A Holder that disposed
of its Preferred Securities prior to the record date for the
payment of interest at the end of an Extension Period would not
receive cash from TU Electric Capital related to such interest
because the accrued distributions related to such interest will
<PAGE>

be paid to the Holder of record on such record date, regardless
of who the Holder of record may have been on other dates during
the Extension Period. In addition, as a result of the Company's
right to extend the interest payment period, the market price of
the Preferred Securities may be more volatile than debt
instruments with OID which do not afford the issuer such a right.
See CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES -
"Original Issue Discount."

In addition, if the issue price of the Junior Subordinated
Debentures (fair market value of the Preferred Securities at the
time of their exchange of Depositary Shares, not including any
cash received) at the time of issuance of the Preferred
Securities is less than their stated principal amount, the
difference will be additional OID, a pro rata share of which will
be includable in the gross income of the Holders over the term of
such Preferred Securities.

RIGHTS UNDER THE GUARANTEE; LIMITATION AS TO FUNDS AVAILABLE TO
TU ELECTRIC CAPITAL

The Guarantee will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (Trust Indenture Act).
The Bank of New York will act as indenture trustee under the
Guarantee for the purposes of compliance with the Trust Indenture
Act (Guarantee Trustee). The Bank of New York will also act as
trustee for the Junior Subordinated Debentures and will hold the
Guarantee for the benefit of the Holders of the Preferred
Securities.

The Guarantee guarantees to the Holders of the Preferred
Securities the payment (but not the collection) of (i) any
accrued and unpaid distributions required to be paid on the
Preferred Securities, to the extent TU Electric Capital has funds
available therefor, (ii) the redemption price, including all
accrued and unpaid distributions, with respect to Preferred
Securities called for redemption by the Issuer, to the extent TU
Electric Capital has funds available therefor and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination
of TU Electric Capital (other than in connection with a
redemption of all of the Preferred Securities), the lesser of (a)
the aggregate of the liquidation preference and all accrued and
unpaid distributions on the Preferred Securities to the date of
payment and (b) the amount of assets of TU Electric Capital
remaining available for distribution to Holders of the Preferred
Securities in liquidation of TU Electric Capital. The Holders of
a majority in liquidation preference of the Preferred Securities
have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee
or to direct the exercise of any trust or power conferred upon
the Guarantee Trustee under the Guarantee. If the Company were to
default on its obligations under the Junior Subordinated
Debentures, TU Electric Capital would lack available funds for
the payment of distributions or amounts payable on redemption of
<PAGE>

the Preferred Securities or otherwise, and in such event Holders
of the Preferred Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, Holders of the
Preferred Securities would be required to rely on the enforcement
by the Property Trustee of its rights, as registered Holder of
the Junior Subordinated Debentures, against the Company pursuant
to the terms of the Junior Subordinated Debentures. See
DESCRIPTION OF THE GUARANTEE - "Status of the Guarantee" and
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES -
"Subordination" herein. The Trust Agreement pursuant to which TU
Electric Capital has been formed provides that each Holder of
Preferred Securities by acceptance thereof agrees to the
provisions of the Guarantee and the Indenture.

TAX EVENT REDEMPTION OR DISTRIBUTION; POTENTIAL ADVERSE EFFECT ON
MARKET PRICE

Upon the occurrence of a Tax Event, the Company shall cause
the termination of TU Electric Capital and, in connection
therewith, after satisfaction of creditors of TU Electric
Capital, if any, distribute Junior Subordinated Debentures to the
Holders of Trust Securities; provided that, under certain
circumstances the Company shall have the right to redeem the
Junior Subordinated Debentures, in whole or in part, in which
event TU Electric Capital will redeem the Preferred Securities.
There can be no assurance as to the market prices for the Junior
Subordinated Debentures which may be distributed in exchange for
Preferred Securities if a termination and liquidation of TU
Electric Capital were to occur. Accordingly, such Junior
Subordinated Debentures could, if distributed, trade at a
discount to the price of the Depositary Shares exchanged. See
DESCRIPTION OF THE PREFERRED SECURITIES - "Tax Event Redemption
or Distribution" and CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES.

NO ESTABLISHED TRADING MARKET FOR PREFERRED SECURITIES

The Preferred Securities constitute a new issue of
securities with no established trading market. While the Company
will apply to list the Preferred Securities on the NYSE, a
minimum of 400 beneficial holders and 1,000,000 outstanding
securities is required for listing a new class of securities on
the NYSE. Accordingly, no assurance can be given as to the
liquidity of, or the development and maintenance of trading
<PAGE>

markets for, the Preferred Securities or whether the sales price
of the Preferred Securities on the NYSE at the time of issuance
thereof (or at any time thereafter) will be greater than or less
than either the stated liquidation preference thereof or the
closing sales price of the Depositary Shares on the NYSE on the
Expiration Date. See LISTING AND TRADING OF PREFERRED SECURITIES
AND DEPOSITARY SHARES.

DEALER MANAGERS MARKET ACTIVITY; NO ASSURANCE AS TO ACTIVE MARKET

DEPOSITARY SHARES MAY BE DELISTED; MARKET FOR DEPOSITARY SHARES
MAY BECOME ILLIQUID

To the extent that more than 7,559,300 of the $1.875
Depositary Shares or 6,513,700 of the $1.805 Depositary Shares
are tendered and accepted in the Exchange Offer and the market
value of publicly held Depositary Shares of such series is
reduced to less than $2,000,000, the Company would be required to
delist the Depositary Shares from the NYSE pursuant to the rules
and regulations of the NYSE, and the trading market for shares of
Depositary Shares which are not tendered and accepted could be
adversely affected. See LISTING AND TRADING OF PREFERRED
SECURITIES AND DEPOSITARY SHARES.

TRADING PRICE; POTENTIAL ADVERSE INCOME TAX EFFECT

The Preferred Securities may trade at a price that does not
fully reflect the value of accrued but unpaid interest with
respect to the underlying Junior Subordinated Debentures. A
Holder that disposes of Preferred Securities between record dates
for payments of distributions thereon will be required to include
in his or her income accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition, and to
add such amount to such Holder's adjusted tax basis in his or her
pro rata share of the underlying Junior Subordinated Debentures
deemed disposed of. To the extent the selling price is less than
the Holder's adjusted tax basis (which will include, in the form
of OID, all accrued and unpaid interest), a Holder will recognize
a capital loss. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United
States federal income tax purposes. See CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES - "Original Issue Discount" and
"Sale, Exchange and Retirement of the Preferred Securities."

PREFERRED SECURITIES HAVE NO VOTING RIGHTS
<PAGE>

The Preferred Securities will not have any of the voting
rights of the Depositary Shares. Subject to the Company's right
to extend payment as described under DESCRIPTION OF THE PREFERRED
SECURITIES - "Distributions," Holders will have the right to
receive distributions as and when due but will have only limited
voting rights, exercisable only in the event of a proposed change
in the terms of the Preferred Securities. See DESCRIPTION OF
CERTAIN TERMS OF THE DEPOSITARY SHARES - "Voting Rights."

UNTENDERED SHARES; POTENTIAL ILLIQUIDITY

To the extent that Depositary Shares are tendered and
accepted in the Exchange Offer, the terms on which untendered
Depositary Shares could subsequently be sold could be adversely
affected. See "No Established Trading Market for Preferred
Securities" and "Depositary Shares May be Delisted; Depositary
Shares May Become Illiquid."

THE COMPANY

The Company was incorporated under the laws of the State of
Texas in 1982 and has perpetual existence under the provisions of
the Texas Business Corporation Act. The Company is an electric
utility engaged in the generation, purchase, transmission,
distribution and sale of electric energy wholly within the State
of Texas. The principal executive offices of the Company are
located at Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201;
the telephone number is (214) 812-4600.

The Company is the principal subsidiary of Texas Utilities
Company (Texas Utilities). The other electric utility subsidiary
of Texas Utilities is Southwestern Electric Service Company,
which is engaged in the purchase, transmission, distribution and
sale of electric energy in ten counties in the eastern and
central parts of Texas with a population estimated at 125,000.
Texas Utilities also has five other subsidiaries which perform
specialized functions within the Texas Utilities Company System:
Texas Utilities Fuel Company owns a natural gas pipeline system,
acquires, stores and delivers fuel gas and provides other fuel
services at cost for the generation of electric energy by the
Company; Texas Utilities Mining Company owns, leases and operates
fuel production facilities for the surface mining and recovery of
lignite at cost for the generation of electric energy by the
Company; Texas Utilities Properties Inc. owns, leases and manages
real and personal properties; Texas Utilities Communications Inc.
was recently organized to provide access to advanced
<PAGE>

telecommunications technology, primarily for the System
Companies' expected expanding energy service business in the
future; and Texas Utilities Services Inc. provides financial,
accounting, information technology, personnel, procurement and
other administrative services at cost.

The Company's service area covers the north central, eastern
and western parts of Texas, with a population estimated at
5,730,000 - about one-third of the population of Texas. Electric
service is provided in 91 counties and 372 incorporated
municipalities, including Dallas, Fort Worth, Arlington, Irving,
Plano, Waco, Mesquite, Grand Prairie, Wichita Falls, Odessa,
Midland, Carrollton, Tyler, Richardson and Killeen. The area is a
diversified commercial and industrial center with substantial
banking, insurance, communications, electronics, aerospace,
petrochemical and specialized steel manufacturing, and automotive
and aircraft assembly. The territory served includes major
portions of the oil and gas fields in the Permian Basin and East
Texas, as well as substantial farming and ranching sections of
the State. It also includes the Dallas-Fort Worth International
Airport and the Alliance Airport.

TU ELECTRIC CAPITAL

TU Electric Capital is a statutory business trust created
under Delaware law pursuant to (i) a trust agreement executed by
the Company, as depositor for TU Electric Capital, and the
Property Trustee and the Delaware Trustee and the Administrative
Trustees (each as defined herein) of such trust (Original Trust
Agreement) and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on September 28, 1995. Such trust
agreement will be amended and restated in its entirety (as so
amended and restated, the Trust Agreement) substantially in the
form filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. The Trust Agreement will be
qualified as an indenture under the Trust Indenture Act. TU
Electric Capital exists for the exclusive purposes of (i) issuing
Trust Securities representing undivided beneficial interests in
the assets of TU Electric Capital, (ii) holding the Junior
Subordinated Debentures as trust assets and (iii) engaging in
only those other activities necessary or incidental thereto. All
of the Common Securities will be owned by the Company. The
Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities, except that upon
the occurrence and continuance of a default under, the Trust
Agreement, the rights of the Holder of the Common Securities to
payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the
rights of the Holders of the Preferred Securities. The Company
will acquire Common Securities having an aggregate liquidation
preference amount equal to 3% of the total capital of TU Electric
Capital. TU Electric Capital has a term of approximately 40
years, but may terminate earlier as provided in the Trust
Agreement. TU Electric Capital's business and affairs will be
<PAGE>

conducted by the Administrative Trustees (as defined herein).
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 TU Electric Capital is c/o Texas
Utilities Electric Company, Energy Plaza, 1601 Bryan Street,
Dallas, Texas 75201.

SUMMARY FINANCIAL INFORMATION

(THOUSANDS OF DOLLARS, EXCEPT RATIOS AND PERCENTAGES)

The following material, which is presented herein solely to
furnish limited introductory information, is qualified in its
entirety by, and should be considered in conjunction with, the
other information appearing in this Prospectus, including the
Incorporated Documents. In the opinion of the Company, all
adjustments (constituting only normal recurring accruals)
necessary for a fair statement of the results of operations for
the twelve months ended September 30, 1995, have been made.

TWELVE MONTHS ENDED
-------------------

DECEMBER 31,
---------------------------------------------
1990 1991 1992
---- ---- ----

Income statement data:
Operating Revenues. . . . . . . . $4,540,915 $4,891,522 $4,906,695
Net Income (Loss)(a). . . . . . . 964,276 (289,173) 821,123
Ratio of Earnings to
Fixed Charges (a)(b) . . . . . . 2.54 0.34 2.48
Ratio of Earnings to
Fixed Charges and
Preferred Dividends (a)(b) . . . 2.13 0.27 2.08

TWELVE MONTHS ENDED
------------------- September 30,
DECEMBER 31, 1995
---------------------------------------
1993 1994 (Unaudited)
---------------------------------------

Income statement data:
Operating Revenues. . . . . $5,409,156 $5,613,175 $5,545,186
Net Income (Loss)(a). . . . 476,526 658,192 408,083
Ratio of Earnings to
Fixed Charges (a)(b) . . . 2.00 2.45 1.92
Ratio of Earnings to
Fixed Charges and
Preferred Dividends (a)(b) 1.62 2.03 1.62

Adjusted(c)
-----------
Outstanding at
September 30, 1995 Amount
------------------ ------
Capitalization
(Unaudited):
Long-term Debt. . . . . . . . . . $7,234,493 $7,052,959
Preferred Stock
Not subject to
mandatory redemption. . . . . . 855,869 374,044
Subject to mandatory redemption. 275,645 275,645
--------- ---------
Total Preferred Stock . . . . . 1,131,514 649,689
Company Obligated Mandatorily
Redeemable Preferred Securities
of Trusts (d). . . . . . . . . . - 481,825
Common Stock Equity. . . . . . . . 5,849,891 5,849,891
--------- ---------
Total Capitalization. . . . . . . $14,215,898 $14,034,364
=========== ===========

Adjusted(c)
-----------
Percent
-------
Capitalization
(Unaudited):
Long-term Debt. . . . . . . . . 50.3%
Preferred Stock
Not subject to mandatory
redemption. . . . . . . . . .
Subject to mandatory
redemption . . . . . . . . . .
Total Preferred Stock. . . . . 4.6
Company Obligated Mandatorily
Redeemable Preferred Securities
of Trusts (d). . . . . . . . . . 3.4
Common Stock Equity . . . . . . . 41.7
----
Total Capitalization. . . . . . 100.0%
======

----------------------

(a) The net loss for the twelve-month period ended December 31,
1991 was due primarily to the recognition of a charge
against earnings, representing a provision for regulatory
disallowances and for fuel gas costs disallowed in the
Company's Docket 9300 rate case. Additionally, the twelve
month periods ended December 31, 1990, December 31, 1991 and
December 31, 1992 were affected by the discontinuation of
the accrual of allowance for funds used during construction
(AFUDC) and the commencement of depreciation on
approximately $1.3 billion of investment in Unit 1 of the
Comanche Peak nuclear generating station (Comanche Peak) and
facilities which are common to Comanche Peak Units 1 and 2
incurred after the end of the June 30, 1989 test year and,
therefore, not included in the Company's Docket 9300 rate
case. Effective January 1992, the Company began recording
base rate revenue for energy sold but not billed to achieve
a better matching of revenues and expenses. The effect of
this change in accounting increased net income for the
twelve months ended December 31, 1992, by approximately $102
million, of which approximately $80 million represents the
cumulative effect of the change in accounting at January 1,
1992. The twelve-month period ended December 31, 1993 was
affected by the recording of regulatory disallowances in
Docket 11735 (See the 1994 10-K.). The twelve month period
ended September 30, 1995 was affected by the impairment of
several nonperforming assets. (See the Company's Current
Report on Form 8-K dated October 17, 1995).

(b) The Company's earnings were inadequate to cover its fixed
charges and its fixed charges and preferred dividends for
the twelve month period ended December 31, 1991. The
deficiencies in such coverage were $499,062,000 and
<PAGE>

$706,809,000, respectively. The computations of the ratios
of earnings to fixed charges and earnings to fixed charges
and preferred dividends do not include interest payments
made by affiliated companies on senior notes, which are
recovered currently through the fuel component of rates.

(c) To give effect to (1) this transaction and the
contemporaneous filing of an offer by the Company to
exchange for preferred securities or for cash 5,000,000
outstanding shares of $2.05 depositary shares, assuming that
all such depositary shares and all the Depositary Shares are
validly tendered and accepted by the Company for exchange
for preferred securities, (2) the prepayment in October 1995
of $175,534,049 of long-term debt, and (3) the anticipated
redemption in November 1995 of $6,000,000 of First Mortgage
Bonds. Adjusted amounts do not reflect any possible future
sales from time to time by TU Electric of up to $300,000,000
Medium-Term Notes pursuant to a program established in
October 1995, $350,000,000 principal amount of First
Mortgage Bonds and $25,000,000 of the Company's cumulative
preferred stock (Preferred Stock), for which registration
statements are effective pursuant to Rule 415 under the
Securities Act of 1933 (1933 Act).

(d) The sole assets of such trusts consist of junior
subordinated debentures of the Company in principal amounts,
and having other payment terms, corresponding to the
securities issued by such trusts.

RATE PROCEEDINGS

In July 1994, the Company filed a petition in the 200th
Judicial District Court of Travis County, Texas to seek judicial
review of the final order of the Public Utility Commission of
Texas (PUC) granting a $449 million, or 9.0%, rate increase in
connection with the Company's January 1993 rate increase request
of $760 million, or 15.3% (Docket 11735). Other parties to the
PUC proceedings also filed appeals with respect to various
portions of the order. The Company is unable to predict the
outcome of such appeals.

The PUC's final order (Order) in connection with the
Company's January 1990 rate increase request (Docket 9300) was
reviewed by the 250th Judicial District Court of Travis County,
Texas (District Court) and thereafter was appealed to the Court
of Appeals for the Third District of Texas (Court of Appeals).
In June 1994, the Court of Appeals affirmed a prudence
disallowance of $472 million provided for in the Order with
respect to the Company's Comanche Peak nuclear generating station
(Comanche Peak), reversed and remanded the portion of the
District Court's judgment that had affirmed a disallowance of $25
<PAGE>

million relating to the Company's reacquisitions of the minority
owner interests in Comanche Peak nuclear fuel, and affirmed the
District Court's remand of the remainder of the disallowance of
$884 million relating to the reacquisitions of such minority
owner interests. Therefore, the Court of Appeals remanded an
aggregate of $909 million of disallowances with respect to the
Company's reacquisitions of minority owner interests in Comanche
Peak to the PUC for reconsideration and ordered that such
reconsideration be on the basis of a prudent investment standard.

In addition, the Court of Appeals reversed the District
Court's finding that the PUC erred in ordering a refund of $2.5
million with respect to certain fuel gas costs. Also, the Court
of Appeals specified that, on remand, the PUC will be required to
re-evaluate the appropriate level of the Company's construction
work in progress included in rate base in light of its financial
condition at the time of the initial hearing and to reconsider
whether the $442 million revenue increase provided for in the
PUC's final order remains the benchmark in light of this re-
examination.

The Court of Appeals also ruled in the appeal of the
Company's Docket 9300 rate case that prior court rulings required
that the tax benefits generated by costs, including capital
costs, not allowed in rates, must be used to reduce rates charged
to customers, reversing the District Court's decision. The
Company believes that such ruling is erroneous and not consistent
with the Texas Public Utility Regulatory Act. The Company
contended that, according to a Private Letter Ruling issued to
the Company by the Internal Revenue Service (IRS) with respect to
investment tax credits, such ratemaking treatment, to the extent
related to property classified for tax purposes as public utility
property, would result in a violation of the normalization rules
under the Internal Revenue Code of 1986, as amended. In
September 1995, the IRS issued another Private Letter Ruling to
the Company, which ruled that such ratemaking treatment would
also violate the normalization rules applicable to depreciation.
Violation of the normalization rules would result in a
significant adverse effect on the Company's results of operation
and liquidity. If there are normalization violations, the
Company will forfeit its investment tax credits that remain
unamortized as of the date of the violation, and will also
forfeit the ability to take advantage of accelerated tax
depreciation in years to which the violative order relates. This
could result in payments to the IRS of up to $1.3 billion. The
Company disagrees with certain portions of the decision of the
Court of Appeals, including specifically its decision with
respect to federal income taxes, and has filed an appeal to the
Supreme Court of Texas. Other parties have also filed appeals of
this decision to the Supreme Court of Texas. The Company cannot
predict whether such appeals will be accepted by the Supreme
Court of Texas and cannot predict the outcome of any such appeals
<PAGE>

or any resulting reconsideration of these issues on remand by the
PUC.

In April 1995, in an appeal of a rate case involving another
utility, the Supreme Court of Texas held that the PUC has
considerable discretion in determining the fair share of
consolidated tax savings to be allocated to a utility and,
accordingly, is not required to include losses of unregulated
affiliates in determining such fair share. The Supreme Court
also held that the PUC could not use the tax benefits generated
by disallowed expenses to reduce rates.

THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

The purpose of the Exchange Offer is to refinance all or a
portion of the Depositary Shares with the Preferred Securities or
repurchase all or a portion of the Depositary Shares and to
achieve certain tax efficiencies for the Company while preserving
the Company's flexibility with respect to future financings. The
Company expects to finance cash purchases of Depositary Shares
pursuant to the Exchange Offer with the proceeds of an offer of
securities similar to the Preferred Securities. This refinancing
will permit the Company to deduct interest payable on the Junior
Subordinated Debentures (and any similar debt issued in
connection with the aforementioned financing) for United States
federal income tax purposes. Dividends payable on the Depositary
Shares are not tax deductible to the Company.

GENERAL

Participation in the Exchange Offer is voluntary, and
Holders of Depositary Shares should carefully consider whether to
tender their Depositary Shares. Neither the Company nor its
Board of Directors makes any recommendation to Holders of
Depositary Shares as to whether to tender all or any portion of
the Depositary Shares owned by such Holder in the Exchange Offer
to elect to receive, as consideration for any Depositary Shares
tendered, either Preferred Securities plus a cash component or a
purchase price in cash only. Holders of Depositary Shares are
urged to consult their financial and tax advisors in making their
decisions on what action to take in light of their own particular
circumstances.

Unless the context requires otherwise, the term Holder
(a) with respect to the Depositary Shares, means (i) any person
in whose name any Depositary Shares are registered on the books
of Chemical Bank, N.A., as Depositary, or (ii) any other person
who has obtained a properly completed stock power from the
registered Holder or (iii) any person whose beneficially owned
Depositary Shares are held of record by a Book-Entry Transfer
Facility (as defined herein) who desires to deliver such
<PAGE>

Depositary Shares by book-entry transfer at a Book-Entry Transfer
Facility, and (b) with respect to any other security, means the
person in whose name such security is registered on the books of
the security registrar with respect thereto.

TERMS OF THE EXCHANGE OFFER

At the option of the Holder thereof, the Company will
exchange each Depositary Share validly tendered and accepted by
the Company for the Holder's selection from the following
consideration: either a Preferred Security with a liquidation
preference of $25.00 plus a cash component of $2.50 or cash only
in the amount of $27.50 for each $1.875 Depositary Share; or
either a Preferred Security with a liquidation preference of
$25.00 plus a cash component of $2.25 or cash only in the amount
of $27.25 for each $1.805 Depositary Share, in each case, upon
the terms and subject to the conditions set forth herein and in
the applicable Letter of Transmittal, See "Procedures for
Tendering." In addition, as part of its Exchange Offer, Holders
of Depositary Shares accepted for exchange will be entitled to
receive the applicable Payment in Lieu of Accumulated Dividends.
Under the terms of the Exchange Offer, the Company intends to
accept any of the Depositary Shares of each series validly
tendered and not withdrawn on or prior to the Expiration Date
and, unless the Exchange Offer has been withdrawn or terminated,
the Company will deliver Preferred Securities and/or any cash
payment in exchange therefor on the Closing Date for such series
to the tendering Holders of Depositary Shares, subject to the
right of the Company to extend, terminate or amend the Exchange
Offer for such series. The Company expressly reserves the right,
in its sole discretion, to delay acceptance for exchange of
Depositary Shares tendered under the Exchange Offer and the
delivery of the Preferred Securities and/or cash payments with
respect to the Depositary Shares accepted for exchange (subject
to Rules 13e-4 and 14e-1 under the Exchange Act, which require
that the Company consummate the Exchange Offer or return the
Depositary Shares deposited by or on behalf of the Holders
thereof promptly after the termination or withdrawal of the
Exchange Offer) at any time prior to the Expiration Date for any
reason including (without limitation) if fewer than 100,000
Depositary Shares of either series would remain outstanding upon
acceptance of those tendered (which condition may be waived by
the Company).

In all cases, except to the extent waived by the Company,
delivery of Preferred Securities and/or cash payments issued with
respect to the Depositary Shares accepted for exchange pursuant
to the Exchange Offer will be made only after timely receipt by
the Exchange Agent of Depositary Shares (or confirmation of book-
entry transfer thereof), a properly completed and duly executed
Letter of Transmittal and any other documents required thereby.
<PAGE>

As of September 30, 1995, there were 7,659,300 $1.875
Depositary Shares and 6,613,700 $1.805 Depositary Shares
outstanding. This Prospectus, together with the applicable
Letters of Transmittal, are being sent to all registered
Holders of Depositary Shares of each series as of November 7, 1995.

The Company shall be deemed to have accepted validly
tendered Depositary Shares (or Depositary Shares which the
Company has, in its sole discretion, determined to be defectively
tendered, with respect to which the Company has waived such
defect) when, as and if the Company has given oral or written
notice thereof to the Exchange Agent. The Exchange Agent will
act as agent for the tendering Holders for the purpose of
receiving the Preferred Securities from the Company and remitting
such Preferred Securities to tendering Holders who are
participating in the Exchange Offer. Upon the terms and subject
to the conditions of the Exchange Offer, delivery of Preferred
Securities will be made to the Exchange Agent on the Closing
Date.

If any tendered Depositary Shares are not accepted for
exchange because of an invalid tender, the occurrence of certain
other events set forth herein or otherwise, unless otherwise
requested by the Holder under "Special Delivery Instructions" in
the Letter of Transmittal, such Depositary Shares will be
returned, without expense, to the tendering Holder thereof (or
in the case of Depositary Shares tendered by book-entry transfer
into the Exchange Agent's account at DTC, such Depositary Shares
will be credited to an account maintained at DTC designated by
the participant therein who so delivered such Depositary Shares),
as promptly as practicable after the Expiration Date with respect
to such shares or the withdrawal or termination of the Exchange
Offer.

Holders of Depositary Shares will not have any appraisal or
dissenters' rights under the Texas Business Corporation Act in
connection with the Exchange Offer. The Company intends to
conduct the Exchange Offer in accordance with the applicable
requirements of the Exchange Act and the rules and regulations of
the Commission thereunder.

Holders who tender Depositary Shares in the Exchange Offer
will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal,
transfer taxes with respect to the exchange of Depositary Shares
pursuant to the Exchange Offer. See FEES AND EXPENSES; TRANSFER
TAXES.

EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
<PAGE>

The Exchange Offer will expire on the Expiration Date. The
Company reserves the right to extend the Exchange Offer with
respect to either series of Depositary Shares in its sole
discretion at any time and from time to time by giving oral or
written notice to the Exchange Agent and by timely public
announcement communicated, unless another means is required by
applicable law or regulation, by making a release to the Dow
Jones News Service. During any extension of the Exchange Offer
with respect to either series of Depositary Shares, all
Depositary Shares of such series previously tendered pursuant to
the Exchange Offer and not withdrawn will remain subject to the
Exchange Offer. The Company has not established a date beyond
which the Exchange Offer with respect to either series of
Depositary Shares may not be extended. The Company expressly
reserves the right to (i) extend, amend or modify the terms of
the Exchange Offer with respect to either series of Depositary
Shares in any manner and (ii) withdraw or terminate the Exchange
Offer with respect to either series of Depositary Shares and not
accept for exchange any such Depositary Shares, at any time prior
to the Expiration Date with respect to such Depositary Shares for
any reason, including (without limitation) if fewer than 100,000
Depositary Shares of such series would remain outstanding upon
acceptance of those tendered in the Exchange Offer (which
condition may be waived by the Company). The Company may
therefore amend the annual distribution rate and/or the amount of
the cash component to be paid upon the exchange of Preferred
Securities for Depositary Shares and may independently change the
amount of cash only to be paid for each Depositary Share, in each
case, with respect to either or both series of Depositary Shares.
If the Company makes a material change in the terms of the
Exchange Offer with respect to either series of Depositary Shares
or if it waives a material condition of the Exchange Offer with
respect to such series, the Company will extend the Exchange
Offer with respect to such series. Any withdrawal or termination
of the Exchange Offer with respect to such series will be
followed as promptly as practicable by public announcement
thereof through the Dow Jones News Service. If the Company
withdraws or terminates the Exchange Offer with respect to either
series of Depositary Shares, it will give immediate notice to the
Exchange Agent, and all Depositary Shares of such series
theretofore tendered pursuant to the Exchange Offer will be
returned promptly to the tendering Holders thereof. See
"Withdrawal of Tenders."

The minimum period for which the Exchange Offer with respect
to either series will be extended following a material change or
waiver will depend upon the facts and circumstances, including
the relative materiality of the change or waiver. With respect
to a change in the amount of Depositary Shares sought, a change
in the consideration offered or a change in the fee to be paid to
Soliciting Dealers, the Exchange Offer with respect to such
series will be extended for a minimum of 10 Business Days
following the date that notice of such change is first published,
sent or given to Holders of Depositary Shares.
<PAGE>

PROCEDURES FOR TENDERING

A separate Letter of Transmittal must be submitted for the
tender of Depositary Shares of each series. Depositary Shares of
each series may be tendered for exchange by indicating on the
applicable Letter of Transmittal the number of shares of such
series being tendered. Each tendering Holder must elect whether
to receive Preferred Securities plus an additional cash
component, or cash only, for the Depositary Shares of each series
by so indicating on the applicable Letter of Transmittal for such
series.

The tender of Depositary Shares by a Holder thereof pursuant
to one of the procedures described below will constitute an
agreement between such Holder and the Company in accordance with
the terms and subject to the conditions set forth in the Exchange
Offer and in the Letter of Transmittal.

Each Holder of the Depositary Shares wishing to participate
in the Exchange Offer must (i) properly complete and sign the
applicable Letter of Transmittal in accordance with the
instructions contained herein and in such Letter of Transmittal,
including such Holder's election to receive Preferred Securities
plus an additional cash component or cash only for all the
Depositary Shares tendered in connection with such Letter of
Transmittal, together with any required signature guarantees, and
deliver the same to the Exchange Agent, at one of its addresses
set forth in "Exchange Agent and Information Agent" prior to the
Expiration Date and either (a) certificates for the Depositary
Shares must be received by the Exchange Agent at such address or
(b) such Depositary Shares must be transferred pursuant to the
procedures for book-entry transfer described below and a
confirmation of such book-entry transfer must be received by the
Exchange Agent, in each case prior to the Expiration Date or
(ii) comply with the guaranteed delivery procedures described
below.

In order to participate in the Exchange Offer, Holders of
Depositary Shares must comply with the other procedures for
tendering in accordance with the instructions contained herein
and in the Letter of Transmittal prior to the Expiration Date.
Except as otherwise noted herein, after the Expiration Date with
respect to a series of Depositary Shares, tendering Holders of
Depositary Shares of such series may not withdraw tendered shares
from the Exchange Offer.

LETTERS OF TRANSMITTAL, CERTIFICATES FOR DEPOSITARY SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT ONLY TO THE
EXCHANGE AGENT; NOT TO THE COMPANY, TU ELECTRIC CAPITAL, THE
DEALER MANAGERS OR THE INFORMATION AGENT.

Signature Guarantees. If tendered Depositary Shares are
registered in the name of the signer of a Letter of Transmittal
and beneficial ownership of the Preferred Securities to be issued
<PAGE>

in exchange therefor is to be issued (and any untendered
Depositary Shares are to be reissued) in the name of the
registered Holder (which term, for the purposes described herein,
shall include any participant in DTC whose name appears on a
security listing as the owner of Depositary Shares), the
signature of such signer need not be guaranteed. If the tendered
Depositary Shares are registered in the name of someone other
than the signer of such Letter of Transmittal, such tendered
Depositary Shares must be endorsed or accompanied by written
instruments of transfer in a form satisfactory to the Company and
duly executed by the registered Holder, and the signature on the
endorsement or instrument of transfer must be guaranteed by a
financial institution (including a bank, savings and loans
association or brokerage house) that is a participant in the
Security Transfer Agents Medallion Program or the Stock Exchange
Medallion Program (any of the foregoing hereinafter referred to
as an Eligible Institution). If the Preferred Securities and/or
the Depositary Shares not exchanged are to be delivered to an
address other than that of the registered Holder appearing on the
register for the Depositary Shares, the signature in the Letter
of Transmittal must be guaranteed by an Eligible Institution.

Book-Entry Transfer. As used herein, a Book-Entry Transfer
Facility shall mean any of DTC, Midwest Securities Trust Company
or Philadelphia Depository Trust Company. The Company
understands that the Exchange Agent will make a request promptly
after the date of this Prospectus to establish an account with
respect to the Depositary Shares at each Book-Entry Transfer
Facility for the purpose of facilitating the Exchange Offer, and
subject to the establishment thereof, any financial institution
that is a participant in a Book-Entry Transfer Facility's system
may make book-entry delivery of Depositary Shares by causing such
Book-Entry Transfer Facility to transfer such Depositary Shares
in accordance with such Book-Entry Transfer Facility's Automated
Tender Offer Program or other similar procedures (ATOP) for such
book-entry transfers. However, the exchange for the Depositary
Shares so tendered will only be made after timely confirmation
(Book-Entry Confirmation) of such Book-Entry Transfer of
Depositary Shares into the Exchange Agent's account and timely
receipt by the Exchange Agent of an Agent's Message (as such term
is defined in the next sentence), the Letter of Transmittal and
any other documents required by the Letter of Transmittal. The
term Agent's Message means a message, transmitted by a Book-Entry
Transfer Facility and received by the Exchange Agent and forming
a part of a Book-Entry Confirmation, which states that such Book-
Entry Transfer Facility has received an express acknowledgment
from a participant tendering Depositary Shares that is the
subject of such Book-Entry Confirmation that such participant has
received and agrees to be bound by the terms of the Letter of
Transmittal, and that the Company may enforce such agreement
against such participant.

Guaranteed Delivery. If a Holder desires to participate in
the Exchange Offer and time will not permit a Letter of
<PAGE>

Transmittal or certificates for Depositary Shares to reach the
Exchange Agent before the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis, a
tender may be effected if the Exchange Agent has received at its
office prior to the Expiration Date, a letter, telegram or
facsimile transmission from an Eligible Institution setting forth
the name and address of the tendering Holder, the name(s) in
which the Depositary Shares are registered and, if the Depositary
Shares are held in certificated form, the certificate numbers of
the Depositary Shares to be tendered, and stating that the tender
is being made thereby and guaranteeing that within three NYSE
trading days after the date of execution of such letter, telegram
or facsimile transmission by the Eligible Institution, the
Depositary Shares in proper form for transfer together with a
properly completed and duly executed Letter of Transmittal (and
any other required documents), or a confirmation of book-entry
transfer of such Depositary Shares into the Exchange Agent's
account at a Book-Entry Transfer Facility, will be delivered by
such Eligible Institution. Unless the Depositary Shares being
tendered by the above-described method are deposited with the
Exchange Agent within the time period set forth above
(accompanied or preceded by a properly completed Letter of
Transmittal and any other required documents) or a confirmation
of book-entry transfer of such Depositary Shares into the
Exchange Agent's account at a Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's ATOP
procedures is received, the Company may, at its option, reject
the tender. In addition to the copy being transmitted herewith,
copies of a Notice of Guaranteed Delivery which may be used by
Eligible Institutions for the purposes described in this
paragraph are available from the Exchange Agent and the
Information Agent.

Miscellaneous. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for
exchange of any tender of Depositary Shares will be determined by
the Company, in its sole discretion, and such determination will
be final and binding. The Company reserves the absolute right to
reject any or all tenders that it determines are not in proper
form or the acceptance for exchange of which may, in the opinion
of the Company's counsel, be unlawful. The Company also reserves
the absolute right to waive any defect or irregularity in the
tender of any Depositary Shares, and the Company's interpretation
of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) will be final and
binding. None of the Company, the Exchange Agent, the Dealer
Managers, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such
notification.

Tenders of Depositary Shares involving any irregularities
will not be deemed to have been made until such irregularities
have been cured or waived. Depositary Shares received by the
<PAGE>

Exchange Agent that are not validly tendered and as to which the
irregularities have not been cured or waived will be returned by
the Exchange Agent to the tendering Holder (or in the case of
Depositary Shares tendered by book-entry transfer into the
Exchange Agent's account at a Book-Entry Transfer Facility, such
Depositary Shares will be credited to an account maintained at
such Book-Entry Transfer Facility designated by the participant
therein who so delivered such Depositary Shares), unless
otherwise requested by the Holder in the Letter of Transmittal,
as promptly as practicable after the Expiration Date or the
withdrawal or termination of the Exchange Offer.

LETTER OF TRANSMITTAL

The Letter of Transmittal with respect to each series of
Depositary Shares contains, among other things, the following
terms and conditions, which are part of the Exchange Offer:

The party tendering Depositary Shares for exchange
(Transferor) exchanges, assigns and transfers such Depositary
Shares to the Company and irrevocably constitutes and appoints
the Exchange Agent as the Transferor's agent and attorney-in-fact
to cause such Depositary Shares to be assigned, transferred and
exchanged. The Transferor represents and warrants that it has
full power and authority to tender, exchange, assign and transfer
such Depositary Shares and, in the event such an election has
been made, to acquire beneficial ownership of Preferred
Securities issuable upon the exchange of such tendered Depositary
Shares, and that, when such Transferor's Depositary Shares are
accepted for exchange, the Company will acquire good and
unencumbered title to such tendered Depositary Shares free and
clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim. The Transferor also represents
that it will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to
complete the exchange, assignment and transfer of the tendered
Depositary Shares or transfer ownership of such Depositary Shares
on the account books maintained by a Book-Entry Transfer
Facility. All authority conferred by the Transferor will survive
the death, bankruptcy or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs,
legal representative, successors, assigns, executors and
administrators of such Transferor.

WITHDRAWAL OF TENDERS

Tenders of Depositary Shares of either series pursuant to
the Exchange Offer may be withdrawn at any time prior to the
Expiration Date with respect to such series and, unless accepted
for exchange by the Company, may be withdrawn at any time after
January 5, 1996. Depositary Shares of either series that have
been withdrawn may be retendered prior to the Expiration Date
<PAGE>

with respect to such series for exchange for the same or a
different form of offered consideration.

To be effective, a written notice of withdrawal delivered by
mail, hand delivery or facsimile transmission must be timely
received by the Exchange Agent at the address set forth below
under "Exchange Agent and Information Agent." The method of
notification is at the risk and election of the Holder. Any such
notice of withdrawal must specify (i) the series of the
Depositary Shares to be withdrawn (ii) the Holder named in the
Letter of Transmittal as having tendered Depositary Shares to be
withdrawn, (iii) if the Depositary Shares are held in
certificated form, the certificate numbers of the Depositary
Shares to be withdrawn, (iv) that such Holder is withdrawing his
election to have such Depositary Shares exchanged and (v) the
name of the registered Holder of such Depositary Shares, and must
be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal (including any required
signature guarantees) or be accompanied by evidence satisfactory
to the Company that the person withdrawing the tender has
succeeded to the beneficial ownership of the Depositary Shares
being withdrawn. The Exchange Agent will return the properly
withdrawn Depositary Shares promptly following receipt of notice
of withdrawal. If Depositary Shares have been tendered pursuant
to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at a
Book-Entry Transfer Facility to be credited with the withdrawn
Depositary Shares and otherwise comply with such Book-Entry
Transfer Facility's procedures. All questions as to the validity
of notice of withdrawal, including time of receipt, will be
determined by the Company, in its sole discretion, and such
determination will be final and binding on all parties. Properly
withdrawn Depositary Shares, however, may be retendered by
following the procedures therefor described elsewhere herein at
any time prior to the Expiration Date with respect thereto. See
"Procedures for Tendering."

ACCEPTANCE OF DEPOSITARY SHARES; DELIVERY OF PREFERRED
SECURITIES

The Company expressly reserves the right, in its sole
discretion, to delay acceptance for exchange of Depositary Shares
of either series tendered under the Exchange Offer and the
delivery of the Preferred Securities with respect to the
Depositary Shares of such series accepted for exchange (subject
to Rules 13e-4 and 14e-1 under the Exchange Act, which require
that the Company consummate the Exchange Offer or return the
Depositary Shares deposited by or on behalf of the Holders
thereof promptly after the termination or withdrawal of the
Exchange Offer) at any time prior to the Expiration Date with
respect thereto for any reason including (without limitation) if
fewer than 100,000 Depositary Shares of such series would
<PAGE>

remain outstanding upon acceptance of those tendered (which
condition may be waived by the Company).

All Depositary Shares not accepted pursuant to the Exchange
Offer will be returned to the tendering Holders at the Company's
expense as promptly as practicable following the Expiration Date.

All Depositary Shares of either series accepted pursuant to
the Exchange Offer will be delivered to the Company in exchange
for Preferred Securities and will be retired and canceled and a
corresponding number of shares of the series of Preferred Stock
underlying such series of Depositary Shares (in each case,
Underlying Preferred) will be withdrawn from the Depositary and
canceled.

EXCHANGE AGENT AND INFORMATION AGENT

The Exchange Agent is:

CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.

BY HAND: BY OVERNIGHT
COURIER:

Office Hours: 9:00 a.m. 5:00 p.m. Chemical Mellon
Shareholder Services, L.L.C.
(New York City Time) Reorganization
Department
Chemical Mellon Shareholder Services, L.L.C. 85 Challenger Road
Reorganization Department Ridgefield Park, New
Jersey 07660
120 Broadway
13th Floor
New York, New York 10271

BY MAIL:
(registered or certified mail recommended)
Chemical Mellon Shareholder Services, L.L.C.
Reorganization Department
P.O. Box 817
Midtown Station
New York, New York 10018

Facsimile Transmission
(201) 296-4293
(For Eligible Institutions Only)
<PAGE>

Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(201) 296-4209

D.F. King & Co., Inc. has been retained by the Company as
the Information Agent to assist in connection with the Exchange
Offer. Questions and requests for assistance regarding the
Exchange Offer, requests for additional copies of this Prospectus
or of Letters of Transmittal and requests for Notice of
Guaranteed Delivery may be directed to D.F. King & Co., Inc. at
(800) 697-6974. Banks and brokers call collect (212) 269-5550.

The Company will pay the Exchange Agent and Information
Agent reasonable and customary fees for their services and will
reimburse them for all their reasonable out-of-pocket expenses in
connection therewith.

DEALER MANAGERS

Merrill Lynch & Co., Goldman, Sachs & Co., Lehman Brothers
Inc. and Smith Barney Inc. are acting as Dealer Managers for the
Exchange Offer under a Dealer Managers Agreement dated November
7, 1995 (Dealer Managers Agreement). Pursuant to the Dealer
Managers Agreement, the Company has agreed to pay the Dealer
Managers, upon acceptance for payment of Depositary Shares
pursuant to the Exchange Offer, a fee of $.125 per Depositary
Share accepted in the Exchange Offer. The Dealer Managers will
also be reimbursed by the Company for their reasonable out-of-
pocket expenses, including certain attorneys' fees. The Company
has agreed to indemnify the Dealer Managers against certain
liabilities in connection with the Exchange Offer, including
certain liabilities under the federal securities laws. See FEES
AND EXPENSES; TRANSFER TAXES.

The Dealer Managers will perform those services in
connection with the Exchange Offer as are customarily performed
by investment banking concerns acting as dealer managers in
connection with offers of like nature, including, but not limited
to, soliciting tenders of Depositary Shares pursuant to the
Exchange Offer and communicating generally, and responding to
requests for information and material, regarding the Exchange
Offer and the Preferred Securities with brokers, dealers,
commercial banks and trust companies and other persons, including
the Holders of Depositary Shares.

Each of Merrill Lynch & Co., Goldman, Sachs & Co., Lehman
Brothers Inc. and Smith Barney Inc. engages in transactions with,
and from time to time has performed services for, the Company.
<PAGE>

LISTING AND TRADING OF PREFERRED SECURITIES AND DEPOSITARY SHARES

The Preferred Securities constitute a new issue of
securities with no established trading market. While the Company
will apply to list the Preferred Securities on the NYSE, there
can be no assurance that an active market for the Preferred
Securities will develop or be sustained in the future. The
Dealer Managers currently plan to make a market in the Preferred
Securities following the completion of the Exchange Offer and may
buy and sell the Preferred Securities on a "when and if issued"
basis prior to the completion of the Exchange Offer. However,
there can be no assurance that the Dealer Managers will engage in
such activities or that any active market in the Preferred
Securities will develop or be maintained. Accordingly, no
assurance can be given as to the liquidity of, or trading markets
for, the Preferred Securities.

The Depositary Shares are currently listed on the NYSE. The
following table sets forth for the calendar quarters indicated
the high and low sale prices as reported by the NYSE.

High Low
---- ----

Depositary Shares Depositary
Shares
----------------- ----------
-------
$1.875 Series $1.805 Series $1.875 Series
$1.805 Series
1993:
Third Quarter *$26 1/4 *$25 1/8
Fourth Quarter 26 3/8 *$25 1/2 24 1/2
*$24

1994:
First Quarter 25 7/8 25 3/4 23
22 1/4
Second Quarter 23 1/2 22 3/4 21 7/8
20 1/2
Third Quarter 22 7/8 21 7/8 20 1/2
20
Fourth Quarter 21 1/4 21 19 3/8
18 1/2

1995:
First Quarter 23 22 1/4 20 3/8 19
7/8
Second Quarter 24 7/8 24 3/8 22 21
3/8
<PAGE>

Third Quarter 25 5/8 25 5/8 23 5/8 22
7/8
Fourth Quarter 26 25 3/4 25 1/8 25
(through November 3, 1995)
____________
*From date of issuance to end of period.

Holders of Depositary Shares who do not tender their
Depositary Shares in the Exchange Offer or whose Depositary
Shares are not accepted for exchange will continue to hold such
Depositary Shares and will be entitled to all the rights and
preferences, and will be subject to all of the limitations, as
heretofore have been applicable thereto. To the extent that a
certain number of shares of Depositary Shares of either series
are tendered and accepted in the Exchange Offer and/or the number
of Holders of Depositary Shares of either series is reduced to
below certain levels, the Company, pursuant to NYSE rules and
regulations, would be required to delist the Depositary Shares of
such series from the NYSE, and the trading market for untendered
Depositary Shares of such series could be adversely affected.
The Company does not believe that the Exchange Offer has a
reasonable likelihood of causing the Depositary Shares of either
series to be delisted from the NYSE.

FEES AND EXPENSES; TRANSFER TAXES

The expenses of soliciting tenders of the Depositary Shares
will be borne by the Company. For compensation to be paid to the
Dealer Managers, see THE EXCHANGE OFFER - "Dealer Managers." The
total cash expenditures to be incurred by the Company, other than
fees payable to the Dealer Managers, but including the expenses
of the Dealer Managers, printing, accounting and certain legal
fees, and the fees and expenses of the Exchange Agent, the
Information Agent and the Trustee under the Indenture, are
estimated to be approximately $550,000.

Subject to the receipt of a properly completed and duly
executed notice included in the materials provided to brokers and
dealers (Notice of Solicited Tenders), the Company will pay to
any Soliciting Dealer a solicitation fee of $.50 per Depositary
Share validly tendered, accepted by the Company and exchanged for
Preferred Securities plus cash or $.375 per Depositary Share
validly tendered, accepted by the Company and exchanged for cash
only, in each case pursuant to the Exchange Offer. "Soliciting
Dealer" includes (i) any broker or dealer in securities,
including the Dealer Manager in its capacity as a broker or
dealer, who is a member of any national securities exchange or of
the National Association of Securities Dealers, Inc. (NASD), (ii)
any foreign broker or dealer not eligible for membership in the
<PAGE>

NASD who agrees to conform to the NASD's Rules of Fair Practice
in soliciting tenders outside the United States to the same
extent as though it were an NASD member, or (iii) any bank or
trust company, any one of whom has solicited and obtained a
tender pursuant to the Exchange Offer. No such fee shall be
payable to a Soliciting Dealer in respect of Depositary Shares
registered in the name of such Soliciting Dealer unless such
Depositary Shares are being held by such Soliciting Dealer as
nominee and such Depositary Shares are being tendered for the
benefit of one or more beneficial owners identified in the
applicable Letter of Transmittal or in the applicable Notice of
Solicited Tenders. No such fee shall be payable to a Soliciting
Dealer with respect to the tender of Depositary Shares by a
Holder of record, for the benefit of the beneficial owner, unless
the beneficial owner has designated such Soliciting Dealer. No
such fee shall be payable to a Soliciting Dealer unless the
Soliciting Dealer returns a Notice of Solicited Tenders to the
Depositary within five Business Days after the applicable
Expiration Date. No such fee shall be payable to a Soliciting
Dealer to the extent such Soliciting Dealer is required for any
reason to transfer the amount of such fee to any person (other
than itself). The Dealer Managers may not, until the Expiration
Date with respect to either series of Depositary Shares, buy,
sell, deal or trade in the Depositary Shares of such series for
their own account.

No broker, dealer, bank, trust company or fiduciary shall be
deemed to be the agent of the Company, TU Electric Capital, the
Dealer Managers, the Exchange Agent or the Information Agent for
purposes of the Exchange Offer except that, in any jurisdiction
where the securities, blue sky, or other laws require the
Exchange Offer to be made by or through a licensed broker or
dealer, the Exchange Offer is being made on behalf of the
Company, by the Dealer Managers or one or more registered brokers
or dealers licensed under the law of such jurisdiction.

The Company will pay all transfer taxes, if any, applicable
to the exchange of Depositary Shares pursuant to the Exchange
Offer. If, however, beneficial ownership of Preferred Securities
or shares of Depositary Shares not tendered or accepted for
exchange, are to be issued in the name of, or are to be delivered
to, any person other than the registered Holder of the Depositary
Shares tendered or if a transfer tax is imposed for any reason
other than the exchange of Depositary Shares pursuant to the
Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other person)
will be payable by the tendering Holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not
submitted with a Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering Holder.
Tendering Holders will not be obligated to pay brokerage
commissions or fees to the Dealer Managers, the Exchange Agent,
the Information Agent, the Company or TU Electric Capital.
<PAGE>

DESCRIPTION OF THE PREFERRED SECURITIES

TU Electric Capital was authorized and created by the
Original Trust Agreement. The Preferred Securities and the
Common Securities will be created pursuant to the terms of the
Trust Agreement. The Preferred Securities represent undivided
beneficial interests in the assets of TU Electric Capital and
entitle the Holders thereof to a preference over the Common
Securities in certain circumstances with respect to distributions
and amounts payable on redemption or liquidation, as well as
other benefits as described in the Trust Agreement. The
following summaries of certain provisions of the Trust Agreement
do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, the provisions of
the Trust Agreement, including the definitions therein of certain
terms, and the Trust Indenture Act. Wherever particular sections
or defined terms of the Trust Agreement are referred to, such
sections or defined terms are incorporated herein by reference.
The Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.

GENERAL

All of the Common Securities are owned by the Company. The
Common Securities rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities based on the
liquidation preference of the Trust Securities, except as
described under "Subordination of Common Securities." (Section
4.03) The Junior Subordinated Debentures will be owned by TU
Electric Capital and held by the Property Trustee in trust for
the benefit of the Holders of the Trust Securities. (Section
2.09). The Guarantee is a full and unconditional guarantee with
respect to the Preferred Securities but does not guarantee
payment of distributions or amounts payable on redemption or
liquidation of the Preferred Securities when TU Electric Capital
does not have funds available to make such payments.

DISTRIBUTIONS

The distributions payable on the Preferred Securities will
be fixed at a rate per annum of 8.25% of the stated liquidation
preference amount thereof. The term "distributions" as used
herein includes interest payable on overdue distributions, unless
otherwise stated. The amount of distributions payable for any
period will be computed on the basis of a 360-day year of twelve
30-day months and for any period shorter than a full month, on
the basis of the actual number of days elapsed.
(Section 4.01(b)).

<PAGE>

Distributions on the Preferred Securities will be
cumulative, will accrue from the date of initial issuance
thereof, and will be payable quarterly in arrears, on March 31,
June 30, September 30 and December 31 of each year, commencing
December 31, 1995, except as otherwise described below. Such
distributions will originally accrue from, and include, the
Closing Date and will accrue to, and include, the first
distribution payment date, and thereafter will accrue from, and
exclude, the last distribution payment date through which
distributions have been paid. In the event that any date on
which distributions are otherwise payable on the Preferred
Securities is not a Business Day, payment of the distribution
payable on such date will be made on the next succeeding Business
Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next
succeeding calendar year, payment of such distribution shall be
made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date (each date on
which distributions are otherwise payable in accordance with the
foregoing, a distribution payment date). (Section 4.01(a)). A
Business Day is used herein to mean any day other than a Saturday
or a Sunday or a day on which banking institutions in The City of
New York are authorized or required by law or executive order to
remain closed or a day on which the Corporate Trust Office of the
Property Trustee or the Debenture Trustee (as defined herein) is
closed for business.

It is anticipated that the income of TU Electric Capital
available for distribution to the Holders of the Preferred
Securities will be limited to payments on the Junior Subordinated
Debentures for which TU Electric Capital will exchange the
Preferred Securities and the Common Securities. See DESCRIPTION
OF THE JUNIOR SUBORDINATED DEBENTURES. If the Company does not
make interest payments on the Junior Subordinated Debentures, the
Property Trustee will not have funds available to pay
distributions on the Preferred Securities. The payment of
distributions (if and to the extent TU Electric Capital has
sufficient funds available for the payment of such distributions)
is guaranteed on a limited basis by the Company as set forth
herein under DESCRIPTION OF THE GUARANTEE.

Distributions on the Preferred Securities will be payable to
the Holders thereof as they appear on the register of TU Electric
Capital on the relevant record dates, which is 15 days prior to
the relevant distribution payment date or if such date is not a
Business Day, the next succeeding Business Day. (Section
4.01(d)).

The Company has the right under the Indenture pursuant to
which it will issue the Junior Subordinated Debentures to extend
the interest payment period from time to time on the Junior
Subordinated Debentures to a period not exceeding 20 consecutive
quarters, with the consequence that quarterly distributions on
the Preferred Securities would be deferred (but would continue to
<PAGE>

accrue with interest payable on unpaid distributions at the rate
per annum set forth above, compounded quarterly) by TU Electric
Capital during any such Extension Period. In the event that the
Company exercises this right, during such period the Company may
not declare or pay any dividend or distribution on (other than
dividends paid in shares of Common Stock of the Company), or
redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, or make any guarantee
payments with respect to the foregoing or redeem any indebtedness
that is pari passu with the Junior Subordinated Debentures. Any
Extension Period with respect to payment of interest on the
Junior Subordinated Debentures, or any extended interest payment
period in respect of other Debt Securities or on any similar
securities will apply to all such securities and will also apply
to distributions with respect to the Preferred Securities and all
other securities with terms substantially the same as the
Preferred Securities. 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 may not exceed
20 consecutive quarters or extend beyond the maturity of the
Junior Subordinated Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, the
Company may select a new extended interest payment period,
subject to the foregoing requirements. See DESCRIPTION OF THE
JUNIOR SUBORDINATED DEBENTURES - "Interest" and "Option to Extend
Interest Payment Period." The Holders of Preferred Securities do
not have a right to appoint a special representative in the event
that the Company defers interest on the Junior Subordinated
Debentures.

REDEMPTION OF PREFERRED SECURITIES

The Junior Subordinated Debentures will mature on September
30, 2030, and the Company has the right to redeem the Junior
Subordinated Debentures in whole or in part on or after November
1, 2001, or earlier in certain circumstances upon the occurrence
of a Tax Event, subject to the conditions described under
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES - "Optional
Redemption."

Upon the repayment of the Junior Subordinated Debentures,
whether at maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment shall be applied by
the Property Trustee to redeem a Like Amount (as defined herein)
of Trust Securities, upon not less than 30 nor more than 60 days'
notice, at the redemption price plus accrued and unpaid
distributions. See DESCRIPTION OF THE JUNIOR SUBORDINATED
DEBENTURES - "Optional Redemption."

Like Amount means (i) with respect to a redemption of Trust
Securities, Preferred Securities and Common Securities, each in
<PAGE>

amounts having a liquidation value equal to the proportion all
such securities have to the liquidation value of all the Trust
Securities, together having an aggregate liquidation value equal
to the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, the
proceeds of which are to be used to pay the redemption price plus
accrued and unpaid distributions of such Trust Securities and
(ii) with respect to a distribution of Junior Subordinated
Debentures to Holders of Trust Securities in connection with a
liquidation of TU Electric Capital upon the occurrence of a Tax
Event or the bankruptcy, termination or liquidation of TU
Electric Capital, Junior Subordinated Debentures having a
principal amount equal to the liquidation value of the Trust
Securities of the Holders to which such Junior Subordinated
Debentures are distributed.

TAX EVENT REDEMPTION OR DISTRIBUTION

If at any time, a Tax Event shall occur and be continuing,
TU Electric Capital shall, unless the Junior Subordinated
Debentures are redeemed in the limited circumstances described
below, be terminated with the result that, after satisfaction of
creditors of TU Electric Capital, if any, Junior Subordinated
Debentures in a Like Amount of the Preferred Securities and the
Common Securities would be distributed on a pro rata basis to the
Holders of the Preferred Securities and the Common Securities in
liquidation of such Holders' interests in TU Electrical Capital,
within 90 days following the occurrence of such Tax Event;
provided, however, that as a condition of such termination and
distribution, the Administrative Trustees shall have received an
opinion of nationally recognized independent tax counsel
experienced in such matters (No Recognition Opinion), which
opinion may rely on any then applicable published revenue rulings
of the Internal Revenue Service, to the effect that the Holders
of the Preferred Securities will not recognize any gain or loss
for United States federal income tax purposes as a result of such
termination and distribution of Junior Subordinated Debentures;
and, provided, further, that, if at the time there is available
to TU Electric Capital the opportunity to eliminate, within such
90-day period, the Tax Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some
other similar reasonable measure, which has no adverse effect on
TU Electric Capital or the Company or the Holders of the
Preferred Securities, TU Electric Capital will pursue such
measure in lieu of termination. Furthermore, if (i) the
Administrative Trustees have received an opinion of nationally
recognized independent tax counsel experienced in such matters
(Redemption Tax Opinion) that, as a result of a Tax Event, there
is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Junior Subordinated
Debentures for United States federal income tax purposes even if
the Junior Subordinated Debentures were distributed to the
Holders of Preferred Securities and Common Securities in
liquidation of such Holders' interests in TU Electric Capital as
<PAGE>

described above or (ii) the Administrative Trustees shall have
been informed by such tax counsel that a No Recognition Opinion
cannot be delivered to TU Electric Capital, the Company shall
have the right, upon not less than 30 nor more than 60 days'
notice, to redeem the Junior Subordinated Debentures in whole or
in part for cash within 90 days following the occurrence of such
Tax Event, and promptly following such redemption Preferred
Securities and Common Securities with an aggregate liquidation
preference amount equal to the aggregate principal amount of the
Junior Subordinated Debentures so redeemed will be redeemed by TU
Electric Capital at the Redemption Price on a pro rata basis,
provided, however, that if at the time there is available to the
Company or the Administrative Trustees the opportunity to
eliminate, within such 90-day period, the Tax Event by taking
some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure,
which has no adverse effect on TU Electric Capital, the Company
or the Holders of the Preferred Securities, the Company will
pursue such measure in lieu of redemption and provided further
that the Company shall have no right to redeem the Junior
Subordinated Debentures while the Administrative Trustees on
behalf of TU Electric Capital are pursuing any such ministerial
action. The Common Securities will be redeemed on a pro rata
basis with the Preferred Securities, except that if an Event of
Default under the Trust Agreement has occurred and is continuing,
the Preferred Securities will have a priority over the Common
Securities with respect to payment of the Redemption Price.

"Tax Event" means the receipt by TU Electric Capital 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 manner in which such
amendment, clarification or change is 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 Securities, there is more than an insubstantial risk
that (i) TU Electric Capital is, or will be, subject to United
States federal income tax with respect to interest received on
<PAGE>

the Junior Subordinated Debentures, (ii) interest payable by the
Company on the Junior Subordinated Debentures is not, or will not
be, fully deductible for United States federal income tax
purposes, or (iii) TU Electric Capital is, or will be, subject to
more than a de minimis amount of other taxes, duties or other
governmental charges.

On the date fixed for any distribution of Junior
Subordinated Debentures, upon termination of TU Electric Capital
(i) the Preferred Securities and the Common Securities will no
longer be deemed to be outstanding and (ii) certificates
representing Preferred Securities will be deemed to represent
Junior Subordinated Debentures having an aggregate principal
amount equal to the stated liquidation preference amount of, and
bearing accrued and unpaid interest equal to accrued and unpaid
distributions on, such Preferred Securities until such
certificates are presented to the Company or its agent for
transfer or reissuance.

There can be no assurance as to the market price for the
Junior Subordinated Debentures which may be distributed in
exchange for Preferred Securities if a termination and
liquidation of TU Electric Capital were to occur. Accordingly,
the Junior Subordinated Debentures which the investor may
subsequently receive on termination and liquidation of TU
Electric Capital, may trade at a discount to the price of the
Preferred Securities exchanged. If the Junior Subordinated
Debentures are distributed to the Holders of Preferred Securities
upon the termination of TU Electric Capital, the Company will use
its best efforts to list the Junior Subordinated Debentures on
the NYSE or on such other exchange on which the Preferred
Securities are then listed.

REDEMPTION PROCEDURES

The Company may not redeem fewer than all the Junior
Subordinated Debentures and TU Electric Capital may not redeem
fewer than all the outstanding Preferred Securities unless all
accrued and unpaid distributions have been paid on all Preferred
Securities for all quarterly distribution periods terminating on
or prior to the date of redemption or if a partial redemption of
the Preferred Securities would result in the delisting of the
Preferred Securities by any national securities exchange on which
the Preferred Securities are then listed.

Preferred Securities redeemed on each redemption date shall
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 Securities shall be made and the redemption price plus
accrued and unpaid distributions shall be deemed payable on each
date selected for redemption (Redemption Date) only to the extent
that TU Electric Capital has funds available for the payment of
such redemption price plus accrued and unpaid distributions.
<PAGE>

(Section 4.02(c)). See also "Subordination of Common
Securities."

If TU Electric Capital gives a notice of redemption in
respect of Preferred Securities (which notice will be
irrevocable), then, on or before the Redemption Date, TU Electric
Capital will irrevocably deposit with the paying agent for the
Preferred Securities funds sufficient to pay the applicable
redemption price plus accrued and unpaid distributions and will
give such paying agent irrevocable instructions and authority to
pay the redemption price plus accrued and unpaid distributions to
the Holders thereof upon surrender of their certificates
evidencing Preferred Securities. Notwithstanding the foregoing,
distributions payable on or prior to the redemption date for any
Preferred Securities called for redemption shall be payable to
the Holders of such Preferred Securities on the relevant record
dates for the related distribution payment dates. If notice of
redemption shall have been given and funds deposited as required,
then on the Redemption Date, all rights of Holders of such
Preferred Securities so called for redemption will cease, except
the right of the Holders of such Preferred Securities to receive
the redemption price plus accrued and unpaid distributions, but
without interest thereon, and such Preferred Securities will
cease to be outstanding. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then
payment of the amount payable on such date will be made on the
next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay). In the
event that payment of the redemption price plus accrued and
unpaid distributions in respect of Preferred Securities called
for redemption is improperly withheld or refused and not paid
either by TU Electric Capital or by the Company pursuant to the
Guarantee described herein under DESCRIPTION OF THE GUARANTEE,
distributions on such Preferred Securities will continue to
accrue at the then applicable rate, from the original redemption
date to the date of payment, in which case the actual payment
date will be considered the date fixed for redemption for
purposes of calculating the redemption price plus accrued and
unpaid distributions.

Subject to applicable law (including, without limitation,
United States federal securities law), the Company may at any
time and from time to time purchase outstanding Preferred
Securities by tender, in the open market or by private agreement.

If less than all the Trust Securities are to be redeemed on
a Redemption Date, then the aggregate liquidation preference of
such securities to be redeemed shall be allocated on a pro rata
basis to the Common Securities and the Preferred Securities. The
particular Preferred 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 Securities not
previously called for redemption, by such method as the Property
Trustee shall deem fair and appropriate and which may provide for
<PAGE>

the selection for redemption of Preferred Securities in
liquidation preference amounts equal to $25 or integral multiples
thereof. The Property Trustee shall promptly notify the security
registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected
for partial redemption, the liquidation preference amount thereof
to be redeemed. For all purposes of the Trust Agreement, unless
the context otherwise requires, all provisions relating to the
redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part,
to the portion of the liquidation preference amount of Preferred
Securities that has been or is to be redeemed.
(Section 4.02(f)).

SUBORDINATION OF COMMON SECURITIES

Payment of distributions on, and the redemption price plus
accrued and unpaid distributions of, the Trust Securities, shall
be made pro rata based on the liquidation preference of the Trust
Securities; provided, however, that if on any distribution
payment date or Redemption Date a default (as described below,
see "Events of Default; Notice") under the Trust Agreement shall
have occurred and be continuing, no payment of any Distribution
on, or redemption price plus accrued and unpaid distributions of,
any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all
accumulated and unpaid distributions on all outstanding Preferred
Securities for all distribution periods terminating on or prior
thereto, or in the case of payment of the redemption price plus
accrued and unpaid distributions, the full amount of such
redemption price plus accrued and unpaid distributions on all
outstanding Preferred Securities, shall have been made or
provided for, and all funds available to the Property Trustee
shall first be applied to the payment in full of all
distributions on, or redemption price plus accrued and unpaid
distributions of, Preferred Securities then due and payable.
(Section 4.03(a)).

In the case of any default under the Trust Agreement
resulting from an Event of Default under the Indenture, the
Holder of Common Securities will be deemed to have waived any
such default under the Trust Agreement until the effect of all
such Defaults with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until any such default
under such Trust Agreement with respect to the Preferred
Securities has been so cured, waived or otherwise eliminated, the
Property Trustee shall act solely on behalf of the Holders of the
Preferred Securities and not the Holders of the Common
Securities, and only Holders of Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
(Section 4.03(b)).

LIQUIDATION DISTRIBUTION UPON TERMINATION
<PAGE>

Pursuant to the Trust Agreement, TU Electric Capital shall
terminate and shall be liquidated by the Property Trustee on the
first to occur of: (i) December 31, 2035, the expiration of the
term of TU Electric Capital; (ii) the bankruptcy, dissolution or
liquidation of the Company; (iii) the occurrence of a Tax Event;
and (iv) the redemption of all of the Preferred Securities.
(Sections 9.01 and 9.02).

If an early termination occurs as described in clause (ii)
and (iii) above, TU Electric Capital shall be liquidated by the
Property Trustee as expeditiously as the Property Trustee
determines to be appropriate by adequately providing for the
satisfaction of liabilities of creditors, if any, and by
distributing to each Holder of Preferred Securities and Common
Securities a Like Amount of Junior Subordinated Debentures,
unless such distribution is determined by the Property Trustee
not to be practical, in which event such Holders will be entitled
to receive, out of the assets of TU Electric Capital available
for distribution to Holders after adequate provision, as
determined by the Property Trustee, has been made for the
satisfaction of liabilities of creditors, if any, an amount equal
to, in the case of Holders of Preferred Securities, the aggregate
liquidation preference of the Preferred Securities plus accrued
and unpaid distributions thereon to the date of payment (such
amount being the Liquidation Distribution). If such Liquidation
Distribution can be paid only in part because TU Electric Capital
has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by TU
Electric Capital on the Preferred Securities shall be paid on a
pro rata basis. The Company as Holder of the Common Securities,
will be entitled to receive distributions upon any such
termination pro rata with the Holders of the Preferred
Securities, except that if default has occurred and is continuing
under the Trust Agreement, the Preferred Securities shall have a
preference over the Common Securities. (Sections 9.04(a) and
9.04(d)).

EVENTS OF DEFAULT; NOTICE

Any one of the following events constitutes an Event of
Default under the Trust Agreement (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 an Event of Default as defined in
Section 801 of the Indenture (see DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES - "Events of Default"); or
<PAGE>

(ii) default by the TU Electric Capital 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 TU Electric Capital in the payment
of any redemption price, plus accrued 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
Property Trustee in the Trust Agreement (other than a
covenant or warranty a default in the performance of which
or the breach of which 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 Property Trustee by
the Holders of Preferred Securities having at least 10% of
the total liquidation preference amount of the outstanding
Preferred 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 thereunder;
or

(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Property Trustee;

Within five Business Days after the occurrence of any Event
of Default, the Property Trustee shall transmit to the Holders of
Trust Securities and the Company notice of any such Event of
Default actually known to the Property Trustee, unless such Event
of Default shall have been cured or waived.

Unless an Event of Default shall have occurred and be
continuing, the Property Trustee may be removed at any time by
act of the Holder of the Common Securities. If an Event of
Default has occurred and is continuing, the Property Trustee may
be removed at such time by act of the Holders of Preferred
Securities having a majority of the liquidation preference of the
Preferred Securities. No resignation or removal of the Property
Trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor
Property Trustee in accordance with the provisions of the Trust
Agreement. (Section 8.10).

If an Event of Default described above has not occurred
solely by reason of the requirement that time lapse or notice be
given, and is continuing, the Preferred Securities shall have a
preference over the Common Securities upon termination of TU
Electric Capital as described above. See "Liquidation
Distribution upon Termination."

MERGER OR CONSOLIDATION OF THE PROPERTY TRUSTEE OR THE
DELAWARE TRUSTEE
<PAGE>

Any entity into which the Property Trustee or the Delaware
Trustee may be merged or with which it may be consolidated, or
any entity resulting from any merger, conversion or consolidation
to which the Property Trustee or the Delaware Trustee shall be a
party, or any entity succeeding to all or substantially all the
corporate trust business of the Property Trustee or the Delaware
Trustee, shall be the successor to the Property Trustee or the
Delaware Trustee under the Trust Agreement, provided such entity
shall be otherwise qualified and eligible. (Section 8.12).

VOTING RIGHTS

Holders of Trust Securities shall be entitled to one vote
for each $25 in liquidation preferences represented by their
Trust Securities in respect of any matter as to which such
Holders of Trust Securities are entitled to vote. Except as
described below and under "Amendments to the Trust Agreement,"
and under DESCRIPTION OF THE GUARANTEE - "Amendments and
Assignment" and as otherwise required by law and the Trust
Agreement, the Holders of the Preferred Securities will have no
voting rights. (Section 6.01(a)).

So long as any Junior Subordinated Debentures are held by
the Property Trustee, the Property Trustee 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 the
Junior Subordinated Debentures, (ii) waive any past default which
is waivable under Section 6.01 of the Indenture, (iii) exercise
any right to rescind or annul a declaration that the principal of
all the Junior Subordinated Debentures shall be due and payable
or (iv) consent to any amendment, modification or termination of
the Indenture or the Junior Subordinated Debentures, where such
consent shall be required, without, in each case, obtaining the
prior approval of the Holders of Preferred Securities having of
at least 66 2/3% of the liquidation preference amount of the
outstanding Preferred Securities; provided, however, that where a
consent under the Indenture would require the consent of each
Holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the
prior consent of each Holder of Preferred Securities. The
Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Preferred 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 Preferred Securities may,
after such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly
against the 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 any other person or entity. The Property
Trustee shall notify all Holders of the Preferred Securities of
any notice of default received from the Debenture Trustee. In
<PAGE>

addition to obtaining the foregoing approvals of the Holders of
the Preferred Securities, prior to taking any of the foregoing
actions, the Property Trustee shall receive an opinion of counsel
experienced in such matters to the effect that TU Electric
Capital will not be classified as an association taxable as a
corporation for United States federal income tax purposes on
account of such action. (Section 6.01(b)).

Any required approval of Holders of Preferred Securities may
be given at a separate meeting of Holders of Preferred Securities
convened for such purpose or pursuant to written consent. The
Administrative Trustees will cause a notice of any meeting at
which Holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders
is to be taken, to be given to each Holder of Preferred
Securities in the manner set forth in the Trust Agreement.
(Section 6.02).

No vote or consent of the Holders of Preferred Securities
will be required for TU Electric Capital to redeem and cancel
Preferred Securities in accordance with the Trust Agreement.

Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are owned
by the Company, the Property Trustee or any affiliate of the
Company or the Property Trustee, shall, for purposes of such vote
or consent, be treated as if they were not outstanding.

Holders of the Preferred Securities will have no rights to
appoint or remove the Administrative Trustees, who may be
appointed, removed or replaced solely by the Company as the
Holder of the Common Securities.

AMENDMENTS

The Trust Agreement may be amended from time to time by TU
Electric Capital (on approval of a majority of the Administrative
Trustees) and the Company, without the consent of any Holders of
Trust Securities, (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 the Trust Agreement, which shall not be
inconsistent with the other provisions of the Trust Agreement,
provided, however, that any such amendment shall not adversely
affect in any material respect the interests of any Holder of
Trust Securities or (ii) to modify, eliminate or add to any
provisions of the Trust Agreement to such extent as shall be
necessary to ensure that TU Electric Capital will not be
classified for United States federal income tax purposes as an
association taxable as a corporation at any time that any Trust
Securities are outstanding or to ensure TU Electric Capital's
exemption from the status of an "investment company" under the
<PAGE>

Investment Company Act of 1940, as amended; provided, however,
that, except in the case of clause (ii), such action shall not
adversely affect in any material respect the interests of any
Holder of Trust Securities and, in the case of clause (i), any
amendments of the Trust Agreement shall become effective when
notice thereof is given to the Holders of Trust Securities.

Except as provided below, any provision of the Trust
Agreement may be amended by the Trustees and the Company with (i)
the consent of Holders of Trust Securities representing not less
than a majority in liquidation preference of the Trust Securities
then outstanding and (ii) receipt by the Trustees of an opinion
of counsel to the effect that such amendment or the exercise of
any power granted to the Trustees in accordance with such
amendment will not cause TU Electric Capital to be classified for
federal income tax purposes as an association taxable as a
corporation or affect TU Electric Capital's exemption from status
of an "investment company" under the Investment Company Act of
1940, as amended.

Without the consent of each affected Holder of Trust
Securities, the Trust Agreement may not be amended to (i) change
the amount or timing of any distribution with respect to 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
Holder of Trust Securities to institute suit for the enforcement
of any such payment on or after such date.

CO-TRUSTEES AND SEPARATE TRUSTEE

Unless an Event of Default under the Trust Agreement 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 (as defined in the Trust Agreement) may at the time be
located, the Holder of the Common Securities and the Property
Trustee shall have power to appoint, and upon the written request
of the Property Trustee, the Company, as 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 such
capacity, any property, title, right or power deemed necessary or
desirable, subject to the provisions of the Trust Agreement. If
the Company, as Depositor, does not join in such appointment
within 15 days after the receipt by it of a request so to do, or
in case an Event of Default under the Indenture has occurred and
is continuing, the Property Trustee alone shall have power to
make such appointment. (Section 8.09).
<PAGE>

FORM, EXCHANGE, AND TRANSFER

The Preferred Securities will be issuable only in fully
registered form in units having a liquidation preference amount
of $25 and any integral multiple thereof.

At the option of the Holder, subject to the terms of the
Trust Agreement, Preferred Securities will be exchangeable for
other Preferred Securities of the same series, of any authorized
denomination and of like tenor and aggregate liquidation
preference.

Subject to the terms of the Trust Agreement, Preferred
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 Security
Registrar or at the office of any transfer agent designated by
the Company for such purpose. The Company may designate itself
the Security Registrar. No service charge will be made for any
registration of transfer or exchange of Preferred Securities, but
the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person
making the request. The 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 the Company will be required
to maintain a transfer agent in each place of payment for the
Preferred Securities.

TU Electric Capital will not be required to (i) issue,
register the transfer of, or exchange any Preferred 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 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 Securities so selected for
redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.

REGISTRAR AND TRANSFER AGENT

Texas Utilities Services Inc. will act as registrar and
transfer agent for the Preferred Securities.

Registration of transfers of Preferred Securities will be
effected without charge by or on behalf of TU Electric Capital,
but upon payment (with the giving of such indemnity as TU
Electric Capital or the Company may require) in respect of any
tax or other governmental charges which may be imposed in
relation to it.
<PAGE>

TU Electric Capital will not be required to register or
cause to be registered any transfer of Preferred Securities after
they have been called for redemption except the unredeemed
portion of any Preferred Securities being redeemed in part.

CONCERNING THE PROPERTY TRUSTEE

The Property Trustee is trustee under the Company's Mortgage
and Deed of Trust with respect to substantially all the
properties of the Company, which secures the Company's first
mortgage bonds. The Company maintains deposit accounts and
conducts 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 Indenture.

MISCELLANEOUS

Application will be made to list the Preferred Securities on
the New York Stock Exchange.

The Delaware Trustee will act as the resident trustee in the
State of Delaware and will have no other significant duties. The
Property Trustee will hold the Junior Subordinated Debentures on
behalf of TU Electric Capital and will maintain a payment account
with respect to the Trust Securities, and will also act as
trustee under the Trust Agreement for the purposes of the Trust
Indenture Act. See "Events of Default; Notice." The
Administrative Trustees will administer the day to day operations
of TU Electric Capital. See "Voting Rights."

The Administrative Trustees are authorized and directed to
conduct the affairs of TU Electric Capital and to operate TU
Electric Capital so that TU Electric Capital will not be deemed
to be an "investment company" required to be registered under the
1940 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 the Company for
United States federal income tax purposes. In this connection,
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 such
purposes, as long as such action does not materially adversely
affect the interests of the Holders of the Preferred Securities.

Holders of the Preferred Securities have no preemptive
rights.

DESCRIPTION OF THE GUARANTEE
<PAGE>

Set forth below is a summary of information concerning the
Guarantee that will be executed and delivered by the Company for
the benefit of the Holders from time to time of Preferred
Securities. The Guarantee will be qualified as an indenture
under the Trust Indenture Act. The Bank of New York will act as
Guarantee Trustee under the Guarantee for the purposes of
compliance with the Trust Indenture Act. The terms of the
Guarantee will be those set forth in such Guarantee and those
made part of such Guarantee by the Trust Indenture Act. The
summary does not purport to be complete and is subject in all
respects to the provisions of, and is qualified in its entirety
by reference to, the Guarantee, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part,
and the Trust Indenture Act. The Guarantee Trustee will hold the
Guarantee for the benefit of the Holders of the Preferred
Securities.

GENERAL

The Company will fully and unconditionally agree, to the
extent set forth herein, to pay the Guarantee Payments (as
defined herein) in full to the Holders of the Preferred
Securities (except to the extent paid by or on behalf of TU
Electric Capital), as and when due, regardless of any defense,
right of set-off or counterclaim that the Company may have or
assert. The following payments with respect to the Preferred
Securities, to the extent not paid by or on behalf of TU Electric
Capital (Guarantee Payments), will be subject to the Guarantee
(without duplication): (i) any accrued and unpaid distributions
required to be paid on the Preferred Securities, to the extent TU
Electric Capital has funds available therefor, (ii) the
redemption price, including all accrued and unpaid distributions,
with respect to any Preferred Securities called for redemption by
TU Electric Capital (redemption price plus accrued and unpaid
distributions), to the extent TU Electric Capital has funds
available therefor and (iii) upon a voluntary or involuntary
termination, winding-up or termination of TU Electric Capital
(other than in connection with a redemption of all of the
Preferred Securities), the lesser of (a) the aggregate of the
liquidation preference and all accrued and unpaid distributions
on the Preferred Securities to the date of payment and (b) the
amount of assets of TU Electric Capital remaining available for
distribution to Holders of Preferred Securities in liquidation of
TU Electric Capital. The Company's obligation to make a
Guarantee Payment may be satisfied by direct payment of the
required amounts by the Company to the Holders of Preferred
Securities or by causing TU Electric Capital to pay such amounts
to such Holders.

The Guarantee will be a guarantee with respect to the
Preferred Securities issued by TU Electric Capital from the time
of issuance of the Preferred Securities, but will not apply to
(i) any payment of distributions if and to the extent that TU
Electric Capital does not have funds available to make such
<PAGE>

payments, or (ii) collection of payment. If the Company does not
make interest payments on the Junior Subordinated Debentures held
by TU Electric Capital, TU Electric Capital will not have funds
available to pay distributions on the Preferred Securities. The
Guarantee will rank subordinate and junior in right of payment to
all liabilities of the Company (except those made pari passu by
their terms). See "Status of the Guarantee."

AMENDMENTS AND ASSIGNMENT

Except with respect to any changes that do not materially
adversely affect the rights of Holders of Preferred Securities
(in which case no vote will be required), the terms of the
Guarantee may be changed only with the prior approval of the
Holders of Preferred Securities having at least 66 2/3% of the
liquidation preference amount of the outstanding Preferred
Securities. All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Company and shall inure to the benefit
of the Holders of the Preferred Securities then outstanding.

EVENTS OF DEFAULT

An event of default under the Guarantee will occur upon the
failure of the Company to perform any of its payment obligations
thereunder. The Holders of Preferred Securities having a
majority of the liquidation preference of the Preferred
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 the Guarantee or to direct the
exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee.

If the Guarantee Trustee fails to enforce the Guarantee, any
Holder of Preferred Securities may enforce the Guarantee,
institute a legal proceeding directly against the Company to
enforce the Guarantee Trustee's rights under such Guarantee
without first instituting a legal proceeding against TU Electric
Capital, the Guarantee Trustee or any other person or entity.

The Company will be required to provide annually to the
Guarantee Trustee a statement as to the performance by the
Company of certain of its obligations under the Guarantee and as
to any default in such performance.

The Company will also be required to file annually with the
Guarantee Trustee an officer's certificate as to the Company's
compliance with all conditions under the Guarantee.

INFORMATION CONCERNING THE GUARANTEE TRUSTEE

The Guarantee Trustee, prior to the occurrence of a default
by the Company in performance of the Guarantee, has undertaken to
perform only such duties as are specifically set forth in the
<PAGE>

Guarantee and, after default with respect to the Guarantee, must
exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to
this provision, 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 Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. See DESCRIPTION OF
THE PREFERRED SECURITIES - "Concerning the Property Trustee."

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 of all Preferred Securities, the
distribution of Junior Subordinated Debentures to Holders of
Preferred Securities in exchange for all of the Preferred
Securities or full payment of the amounts payable upon
liquidation of TU Electric Capital. The Guarantee will continue
to be effective or will be reinstated, as the case may be, if at
any time any Holder of Preferred Securities must restore payment
of any sums paid under the Preferred Securities or the Guarantee.

STATUS OF THE GUARANTEE

The Guarantee will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of
payment to all liabilities of the Company (except liabilities
that may be made pari passu by their terms), (ii) pari passu with
the most senior preferred or preference stock now or hereafter
issued by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred or
preference stock of any affiliate of the Company and (iii) senior
to the Company's common stock. The Trust Agreement provides that
each Holder of Preferred Securities by acceptance thereof agrees
to the subordination provisions and other terms of the Guarantee.

The Guarantee will constitute a guarantee of payment and not
of collection (i.e., the guaranteed party may institute a legal
proceeding directly against the Guarantor to enforce its rights
under the Guarantee without first instituting a legal proceeding
against any other person or entity).

GOVERNING LAW

The Guarantee will be governed by and construed in
accordance with the laws of the State of New York.

DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES

Set forth below is a description of the specific terms of
the Junior Subordinated Debentures which TU Electric Capital will
hold as trust assets. The following description does not purport
<PAGE>

to be complete and is qualified in its entirety by reference to
the description in the Indenture between the Company and the
Trustee with respect to the Junior Subordinated Debentures
(Debenture Trustee), which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
Whenever particular provisions or defined terms in the Indenture
are referred to herein, such provisions or defined terms are
incorporated by reference herein. Section references used herein
are references to provisions of the Indenture unless otherwise
noted.

The Indenture provides for the issuance of debentures
(including the Junior Subordinated Debentures), notes or other
evidence of indebtedness by the Company (each a Debt Security) in
an unlimited amount from time to time. The Junior Subordinated
Debentures constitute a separate series under the Indenture.

GENERAL

The Junior Subordinated Debentures will be limited in
aggregate principal amount to the sum of the aggregate
liquidation preference amount of the Preferred Securities and the
consideration paid by the Company for the Common Securities. The
Junior Subordinated Debentures are unsecured, subordinated
obligations of the Company which rank junior to all of the
Company's Senior Indebtedness.

The entire outstanding principal amount of the Junior
Subordinated Debentures will become due and payable, together
with any accrued and unpaid interest thereon, including
Additional Interest (as defined herein), if any, on September
30, 2030. The amounts payable as principal and interest on the
Junior Subordinated Debentures will be sufficient to provide for
payment of distributions payable on the Trust Securities.

If Junior Subordinated Debentures are distributed to Holders
of Preferred Securities in a termination of TU Electric Capital,
such Junior Subordinated Debentures will be issued in fully
registered certificated form in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the
offices described below.

Payments of principal and interest on Junior Subordinated
Debentures will be payable, the transfer of Junior Subordinated
Debenture will be registrable, and Junior Subordinated Debentures
will be exchangeable for Junior Subordinated Debentures of other
denominations of a like aggregate principal amount, at the
corporate trust office of the Debenture Trustee 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 and that the payment in full of
principal with respect to any Junior Subordinated Debenture will
<PAGE>

be made only upon surrender of such Junior Subordinated Debenture
to the Debenture Trustee.

OPTIONAL REDEMPTION

On or after November 1, 2001, the Company will have the
right, at any time and from time to time, to redeem the Junior
Subordinated Debentures, in whole or in part, at a redemption
price equal to 100% of the principal amount of the Junior
Subordinated Debentures being redeemed, together with any accrued
but unpaid interest, including Additional Interest, if any, to
the redemption date.

If a Tax Event shall occur and be continuing, the Company
shall have the right to redeem the Junior Subordinated Debentures
in whole or in part, at a redemption price plus accrued and
unpaid distributions equal to 100% of the principal amount of
Junior Subordinated Debentures then outstanding plus any accrued
and unpaid interest, including Additional Interest, if any, to
the redemption date.

For so long as TU Electric Capital is the Holder of all the
outstanding Junior Subordinated Debentures, the proceeds of any
such redemption will be used by TU Electric Capital to redeem
Preferred Securities and Common Securities in accordance with
their terms. The Company may not redeem less than all the Junior
Subordinated Debentures unless all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all
outstanding Junior Subordinated Debentures for all quarterly
interest periods terminating on or prior to the date of
redemption.

Any optional redemption of Junior Subordinated Debentures
shall be made upon not less than 30 nor more than 60 days' notice
from the Debenture Trustee to the Holders of Junior Subordinated
Debentures, as provided in the Indenture. All notices of
redemption shall state the redemption date, the redemption price
plus accrued and unpaid distributions, if less than all the
Junior Subordinated Debentures are to be redeemed, the
identification of those to be redeemed and the portion of the
principal amount of any Junior Subordinated Debentures to be
redeemed in part; that on the redemption date, subject to the
Trustee's receipt of the redemption monies, the redemption price
plus accrued and unpaid distributions will become due and payable
upon each such Junior Subordinated Debentures to be redeemed and
that interest thereon will cease to accrue on and after said
date; and the place or places where such Securities are to be
surrendered for payment of the redemption price plus accrued and
unpaid distributions.

INTEREST
<PAGE>

The Junior Subordinated Debentures shall bear interest at
the rate of 8.25% per annum. Such interest is payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an Interest Payment Date), commencing December 31,
1995, to the person in whose name each Junior Subordinated
Debenture is registered, by the close of business on the Business
Day 15 days preceding such Interest Payment Date. It is
anticipated that TU Electric Capital will be the sole Holder of
the Junior Subordinated Debentures.

The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months
and for any period shorter than a full month, on the basis of the
actual number of days elapsed (Section 310). In the event that
any date on which interest is payable on the Junior Subordinated
Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on the
date the payment was originally payable (Section 113).

OPTION TO EXTEND INTEREST PAYMENT PERIOD

The Company shall have the right under the Indenture to
extend the interest payment period from time to time on the
Junior Subordinated Debentures to a period not exceeding 20
consecutive quarters during which period interest will be
compounded quarterly. At the end of an Extension Period, the
Company must pay all interest then accrued and unpaid (together
with interest thereon at the rate specified for the Junior
Subordinated Debentures 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,
redeem any indebtedness that is pari passu with the Junior
Subordinated Debentures, or make any guarantee payments with
respect to the foregoing. 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 quarters at any one time or extend beyond the
maturity date of the Junior Subordinated Debentures. Any
extension period with respect to payment of interest on the
Junior Subordinated Debentures, other Debt Securities or on any
similar securities will apply to all such securities and will
also apply to distributions with respect to the Preferred
Securities and all other securities with terms substantially the
<PAGE>

same as the Preferred Securities. Upon the termination of any
such Extension Period and the payment of all amounts then due,
the Company may select 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 TU Electric Capital and the Debenture 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 the NYSE or other applicable
self-regulatory organization of the record date and will cause
the Trust to send notice of such election to the Holders of
Preferred Securities.

ADDITIONAL INTEREST

So long as any Preferred Securities remain outstanding, if
TU Electric Capital shall be required to pay, with respect to its
income derived from the interest payments on the Junior
Subordinated Debentures any amounts for or on account of any
taxes, duties, assessments or governmental charges of whatever
nature imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as
interest on such series such additional interest (Additional
Interest) as may be necessary in order that the net amounts
received and retained by TU Electric Capital after the payment of
such taxes, duties, assessments or governmental charges shall
result in the TU Electric Capital's having such funds as it would
have had in the absence of the payment of such taxes, duties,
assessments or governmental charges.

DEFEASANCE

The principal amount of any series of Debt Securities issued
under the Indenture will be deemed to have been paid for purposes
of the Indenture and the entire indebtedness of the Company in
respect thereof will be deemed to have been satisfied and
discharged, if there shall have been irrevocably deposited with
the Debenture Trustee or any paying agent, in trust: (a) money
in an amount which will be sufficient, or (b) in the case of a
deposit made prior to the maturity of the Junior Subordinated
Debentures, Government Obligations (as defined herein), which do
not contain provisions permitting the redemption or other
prepayment thereof at the option of the issuer thereof, the
principal of and the interest on which when due, without any
regard to reinvestment thereof, will provide moneys which,
together with the money, if any, deposited with or held by the
Debenture Trustee, will be sufficient, or (c) a combination of
(a) and (b) which will be sufficient, to pay when due the
principal of and premium, if any, and interest, if any, due and
to become due on the Debt Securities of such series that are
outstanding. For this purpose, Government Obligations, include
direct obligations of, or obligations unconditionally guaranteed
by, the United States of America entitled to the benefit of the
<PAGE>

full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership
interest in such obligations or in any specific interest or
principal payments due in respect thereof.

It is possible that for federal income tax purposes any
deposit contemplated in the preceding paragraph could be treated
as a taxable exchange of the Junior Subordinated Debentures
outstanding for an issue of obligations of TU Electric Capital or
a direct interest in the cash and securities held by TU Electric
Capital. In that case, Holders of the Junior Subordinated
Debentures outstanding would recognize a gain or loss for federal
income tax purposes, as if their share of TU Electric Capital
obligations or the cash or securities deposited, as the case may
be, had actually been received by them in exchange for their
Junior Subordinated Debentures. In addition, such Holders
thereafter would be required to include in income a share of the
income, gain or loss of TU Electric Capital. The amount so
required to be included in income could be different from the
amount that would be includable in the absence of such deposit.
Prospective investors are urged to consult their own tax advisors
as to the specific consequences to them of such deposit.

SUBORDINATION

The Junior Subordinated Debentures will be subordinate and
junior in right of payment to all Senior Indebtedness of the
Company as provided in the Indenture. No payment of principal of
(including redemption and sinking fund payments), or interest on,
the Junior Subordinated Debentures may be made (i) upon the
occurrence of certain events of bankruptcy, insolvency or
reorganization, (ii) if any Senior Indebtedness is not paid when
due, (iii) if any other default has occurred pursuant to which
the Holders of Senior Indebtedness have accelerated the maturity
thereof and with respect to (ii) and (iii), such default has not
been cured or waived, or (iv) if the maturity of any series of
Debt Securities has been accelerated, because of an event of
default with respect thereto, which remains uncured. Upon any
distribution of assets of the Company to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, 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 thereon. (Section 1502). Subject to the prior
payment of all Senior Indebtedness, the rights of the Holders of
the Junior Subordinated Debentures will be subrogated to the
rights of the Holders of Senior Indebtedness to receive payments
or distributions applicable to Senior Indebtedness until all
amounts owing on the Junior Subordinated Debentures are paid in
full. (Section 1504).

<PAGE>

The term Senior Indebtedness is defined in the Indenture to
mean all obligations (other than non-recourse obligations and the
indebtedness issued under the Indenture) of, or guaranteed or
assumed by, the Company for borrowed money, including both senior
and subordinated indebtedness for borrowed money (other than the
Debt Securities), or for the payment of money relating to any
lease which is capitalized on the consolidated balance sheet of
the Company and its subsidiaries in accordance with generally
accepted accounting principles as in effect from time to time, or
evidenced by bonds, debentures, notes or other similar
instruments, and in each case, amendments, renewals, extensions,
modifications and refundings of any such indebtedness or
obligations, whether existing as of the date of this Indenture or
subsequently incurred by the Company unless, in the case of any
particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness,
renewal, extension or refunding is not superior in right of
payment to or is pari passu with the Junior Subordinated
Debentures; provided that the Company's obligations under the
Guarantee shall not be deemed to be Senior Indebtedness.
(Section 101).

The Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued. As of September 30, 1995, the
Company had approximately $7.5 billion principal amount of
indebtedness for borrowed money constituting Senior Indebtedness.
In addition, as of September 30, 1995, there were approximately
$84.610 million of contingent obligations constituting Senior
Indebtedness where there exists a financially viable and
unrelated primary obligor and where the risk of loss to Company
is, in the opinion of the Company, remote.

CONSOLIDATION, MERGER, AND SALE OF ASSETS

Under the terms of the Indenture, the Company may not
consolidate with or merge into any other entity or convey,
transfer or lease its properties and assets substantially as an
entirety to any entity, unless (i) the corporation formed by such
consolidation or into which the Company is merged or the entity
which acquires by conveyance or transfer, or which leases, the
property and assets of the Company substantially as an entirety
shall be a entity organized and validly existing under the laws
of any domestic jurisdiction and such entity expressly assumes
the Company's obligations on all Debt Securities and under the
Indenture, (ii) immediately after giving effect to the
transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, and (iii) the
Company shall have delivered to the Debenture Trustee an
Officer's Certificate and an Opinion of Counsel as provided in
the Indenture (Section 1101).
<PAGE>

EVENTS OF DEFAULT

Each of the following will constitute an Event of Default
under the Indenture with respect to the Debt Securities of any
series: (a) failure to pay any interest on the Debt Securities
of such series within 30 days after the same becomes due and
payable; (b) failure to pay principal or premium, if any, on the
Debt Securities of such series when due and payable; (c) failure
to perform, or breach of, any other covenant or warranty of the
Company in the Indenture (other than a covenant or warranty of
the Company in the Indenture solely for the benefit of one or
more series of Debt Securities other than such series) for 60
days after written notice to the Company by the Debenture
Trustee, or to the Company and the Debenture Trustee by the
Holders of at least 33% in principal amount of the Debt
Securities of such series outstanding under the Indenture as
provided in the Indenture; (d) the entry by a court having
jurisdiction in the premises of (1) a decree or order for relief
in respect of the Company in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition by one or more Persons other than the
Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official for the Company or for any substantial part of its
property, or ordering the winding up or liquidation of its
affairs, and any such decree or order for relief or any such
other decree or order shall have remained unstayed and in effect
for a period of 90 consecutive days; and (e) the commencement by
the Company of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in
respect of the Company in a case or other similar proceeding or
to the commencement of any bankruptcy or insolvency case or
proceeding against it under any applicable Federal or state law
or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state
law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official
of the Company 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, or the authorization of such action
by the Board of Directors (Section 801).

<PAGE>

An Event of Default with respect to the Debt Securities of a
particular series may not necessarily constitute an Event of
Default with respect to Debt Securities of any other series
issued under the Indenture.

If an Event of Default due to the default in payment of
principal of or interest on any series of Debt Securities or due
to the default in the performance or breach of any other covenant
or warranty of the Company applicable to the Debt Securities of
such series but not applicable to all series occurs and is
continuing, then either the Trustee or the Holders of 33% in
principal amount of the outstanding Debt Securities of such
series may declare the principal of all of the Debt Securities of
such series and interest accrued thereon to be due and payable
immediately (subject to the subordination provisions of the
Indenture). If an Event of Default due to the default in the
performance of any other covenants or agreements in the Indenture
applicable to all outstanding Debt Securities or due to certain
events of bankruptcy, insolvency or reorganization of the Company
has occurred and is continuing, either the Trustee or the Holders
of not less than 33% in principal amount of all outstanding Debt
Securities, considered as one class, and not the Holders of the
Debt Securities of any one of such series may make such
declaration of acceleration (subject to the subordination
provisions of the Indenture).

At any time after the declaration of acceleration with
respect to the Debt Securities of any series has been made and
before a judgment or decree for payment of the money due has been
obtained, the Event or Events of Default giving rise to such
declaration of acceleration will, without further act, be deemed
to have been waived, and such declaration and its consequences
will, without further act, be deemed to have been rescinded and
annulled, if

(a) the Company has paid or deposited with the Debenture
Trustee a sum sufficient to pay

(1) all overdue interest on all Debt Securities of
such series;

(2) the principal of and premium, if any, on any Debt
Securities of such series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Debt Securities;

(3) interest upon overdue interest at the rate or
rates prescribed therefor in such Debt Securities, to the extent
that payment of such interest is lawful; and

(4) all amounts due to the Debenture Trustee under the
Indenture;
<PAGE>

(b) any other Event or Events of Default with respect to
Debt Securities of such series, other than the nonpayment of the
principal of the Debt Securities of such series which has become
due solely by such declaration of acceleration, have been cured
or waived as provided in the Indenture (Section 802).

Subject to the provisions of the Indenture relating to the
duties of the Debenture Trustee in case an Event of Default shall
occur and be continuing, the Debenture Trustee will be under no
obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Debenture Trustee
reasonable indemnity (Section 903). If an Event of Default has
occurred and is continuing in respect of a series of Debt
Securities, subject to such provisions for the indemnification of
the Debenture Trustee, the Holders of a majority in principal
amount of the outstanding Debt Securities of such series will
have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture
Trustee, with respect to the Debt Securities of such series;
provided, however, that if an Event of Default occurs and is
continuing with respect to more than one series of Debt
Securities, the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of all such series,
considered as one class, will have the right to make such
direction, and not the Holders of the Debt Securities of any one
of such series; and provided, further, that such direction will
not be in conflict with any rule of law or with the Indenture.
(Section 812).

No Holder of Debt Securities of any series will have any
right to institute any proceeding with respect to the Indenture,
or for the appointment of a receiver or a trustee, or for any
other remedy thereunder, unless (i) such Holder has previously
given to the Debenture Trustee written notice of a continuing
Event of Default with respect to the Debt Securities of such
series, (ii) the Holders of not less than a majority in aggregate
principal amount of the outstanding Debt Securities of all series
in respect of which an Event of Default shall have occurred and
be continuing, considered as one class, have made written request
to the Debenture Trustee, and such Holder or Holders have offered
reasonable indemnity to the Debenture Trustee to institute such
proceeding in respect of such Event of Default in its own name as
trustee and (iii) the Debenture Trustee has failed to institute
any proceeding, and has not received from the Holders of a
majority in aggregate principal amount of the outstanding Debt
Securities of such series a direction inconsistent with such
request, within 60 days after such notice, request and offer
(Section 807). However, such limitations do not apply to a suit
instituted by a Holder of a Debt Security for the enforcement of
payment of the principal of or any premium or interest on such
Debt Security on or after the applicable due date specified in
such Debt Security (Section 808).
<PAGE>

The Company will be required to furnish to the Debenture
Trustee annually a statement by an appropriate officer as to such
officer's knowledge of the Company's compliance with all
conditions and covenants under the Indenture, such compliance to
be determined without regard to any period of grace or
requirement of notice under the Indenture (Section 606).

MODIFICATION AND WAIVER

Without the consent of any Holder of Debt Securities, the
Company and the Debenture Trustee may enter into one or more
supplemental indentures for any of the following purposes: (a) to
evidence the assumption by any permitted successor to the Company
of the covenants of the Company in the Indenture and in the Debt
Securities; or (b) to add one or more covenants of the Company or
other provisions for the benefit of the Holders of outstanding
Debt Securities or to surrender any right or power conferred upon
the Company by the Indenture; or (c) to add any additional Events
of Default with respect to outstanding Debt Securities; or (d) to
change or eliminate any provision of the Indenture or to add any
new provision to the Indenture, provided that if such change,
elimination or addition will adversely affect the interests of
the Holders of Debt Securities of any series in any material
respect, such change, elimination or addition will become
effective with respect to such series only (1) when the consent
of the Holders of Debt Securities of such series has been
obtained in accordance with the Indenture, or (2) when no Debt
Securities of such series remain outstanding under the Indenture;
or (e) to provide collateral security for all but not part of the
Debt Securities; (f) to establish the form or terms of Debt
Securities of any other series as permitted by the Indenture; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing
interest, if any, thereon and for the procedures for the
registration, exchange and replacement thereof and for the giving
of notice to, and the solicitation of the vote or consent of, the
Holders thereof, and for any and all other matters incidental
thereto; or (h) to evidence and provide for the acceptance of
appointment of a successor Debenture Trustee under the Indenture
with respect to the Debt Securities of one or more series and to
add to or change any of the provisions of the Indenture as shall
be necessary to provide for or to facilitate the administration
of the trusts under the Indenture by more than one trustee; or
(i) to provide for the procedures required to permit the
utilization of a noncertificated system of registration for the
Debt Securities of all or any series; or (j) to change any place
where (1) the principal of and premium, if any, and interest, if
any, on all or any series of Debt Securities shall be payable,
(2) all or any series of Debt Securities may be surrendered for
registration of transfer or exchange and (3) notices and demands
to or upon the Company in respect of Debt Securities and the
Indenture may be served; or (k) to cure any ambiguity or
inconsistency or to add or change any other provisions with
<PAGE>

respect to matters and questions arising under the Indenture,
provided such changes or additions shall not adversely affect the
interests of the Holders of Debt Securities of any series in any
material respect (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 the Company with certain restrictive
provisions of the Indenture (Section 607). The Holders of not
less than a majority in principal amount of the outstanding Debt
Securities of any series may waive any past default under the
Indenture with respect to such series, except a default in the
payment of principal, premium, or interest and certain covenants
and provisions of the Indenture that cannot be modified or be
amended without the consent of the Holder of each outstanding
Debt Security of such series affected (Section 813).

Without limiting the generality of the foregoing, if the
Trust Indenture Act is amended after the date of the Indenture in
such a way as to require changes to the Indenture or the
incorporation therein of additional provisions or so as to permit
changes to, or the elimination of, provisions which, at the date
of the Indenture or at any time thereafter, were required by the
Trust Indenture Act to be contained in the Indenture, the
Indenture will be deemed to have been amended so as to conform to
such amendment of the Trust Indenture Act or to effect such
changes, additions or elimination, and the Company and the
Debenture Trustee may, without the consent of any Holders, enter
into one or more supplemental indentures to evidence or effect
such amendment (Section 1201).

Except as provided above, the consent of the Holders of not
less than a majority in aggregate principal amount of the Debt
Securities of all series then outstanding, considered as one
class, is required for the purpose of adding any provisions to,
or changing in any manner, or eliminating any of the provisions
of, the Indenture or modifying in any manner the rights of the
Holders of such Debt Securities under the Indenture pursuant to
one or more supplemental indentures; provided, however, that if
less than all of the series of Debt Securities outstanding are
directly affected by a proposed supplemental indenture, then the
consent only of the Holders of a majority in aggregate principal
amount of outstanding Debt Securities of all series so directly
affected, considered as one class, will be required; and provided
further, that no such amendment or modification may (a) change
the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debt Security, or reduce the
principal amount thereof or the rate of interest thereon (or the
amount of any installment of interest thereon) or change the
method of calculating such rate or reduce any premium payable
upon the redemption thereof, or change the coin or currency (or
other property) in which any Debt Security or any premium or the
interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the
<PAGE>

Stated Maturity of any Debt Security (or, in the case of
redemption, on or after the redemption date) without, in any such
case, the consent of the Holder of such Debt Security, (b) reduce
the percentage in principal amount of the outstanding Debt
Security of any series, (or, if applicable, in liquidation
preference of Preferred Securities) the consent of the Holders of
which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of
compliance with any provision of the Indenture or any default
thereunder and its consequences, or reduce the requirements for
quorum or voting, without, in any such case, the consent of the
Holder of each outstanding Debt Security of such series, or (c)
modify certain of the provisions of the Indenture relating to
supplemental indentures, waivers of certain covenants and waivers
of past defaults with respect to the Debt Security of any series,
without the consent of the Holder of each outstanding Junior
Subordinated Debenture affected thereby. A supplemental
indenture which changes or eliminates any covenant or other
provision of the Indenture which has expressly been included
solely for the benefit of one or more particular series of Debt
Securities, or modifies the rights of the Holders of Debt
Securities of such series with respect to such covenant or other
provision, will be deemed not to affect the rights under the
Indenture of the Holders of the Debt Securities of any other
series (Section 1202).

The Indenture provides that in determining whether the
Holders of the requisite principal amount of the outstanding Debt
Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture, or
whether a quorum is present at the meeting of the Holders of Debt
Securities, Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company
or of such other obligor (unless the Company, such affiliate or
such obligor owns all Debt Securities outstanding under the
Indenture, determined without regard to this provision) shall be
disregarded and deemed not to be outstanding.

If the Company shall solicit from Holders any request,
demand, authorization, direction, notice, consent, election,
waiver or other Act, the Company may, at its option, fix in
advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice,
consent, waiver or other such act, but the Company shall have no
obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of the
outstanding Debt Securities have authorized or agreed or
consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the
outstanding Debt Securities shall be computed as of the record
<PAGE>

date. Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of a Holder shall bind
every future Holder of the same Debt Security and the Holder of
every Debt Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Debenture
Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Debt Security (Section
104).

RESIGNATION OF DEBENTURE TRUSTEE

The Debenture Trustee may resign at any time by giving
written notice thereof to the Company or may be removed at any
time by Act of the Holders of a majority in principal amount of
all series of Debt Securities then outstanding delivered to the
Debenture Trustee and the Company. No resignation or removal of
the Debenture Trustee and no appointment of a successor trustee
will become effective until the acceptance of appointment by a
successor trustee in accordance with the requirements of the
Indenture. So long as no Event of Default or event which, after
notice or lapse of time, or both, would become an Event of
Default has occurred and is continuing and except with respect to
a Debenture Trustee appointed by Act of the Holders, if the
Company has delivered to the Debenture Trustee a resolution of
its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the
terms of the Indenture, the Trustee will be deemed to have
resigned and the successor will be deemed to have been appointed
as trustee in accordance with the Indenture (Section 910).

NOTICES

Notices to Holders of Debt Securities will be given by mail
to the addresses of such Holders as they may appear in the
security register therefor.

TITLE

The Company, the Debenture Trustee, and any agent of the
Company or the Debenture Trustee, may treat the Person in whose
name Debt Securities are registered as the absolute owner thereof
(whether or not such Debt Securities may be overdue) for the
purpose of making payments and for all other purposes
irrespective of notice to the contrary.

GOVERNING LAW

The Indenture and the Debt Securities will be governed by,
and construed in accordance with, the laws of the State of New
York.

REGARDING THE DEBENTURE TRUSTEE
<PAGE>

The Debenture Trustee under the Indenture is The Bank of New
York. In addition to acting as Debenture Trustee under the
Indenture, The Bank of New York acts as trustee under the
Company's Mortgage and Deed of Trust with respect to
substantially all the properties of the Company, which secures
the Company's first mortgage bonds. In addition, The Bank of New
York acts as Property Trustee under the Trust Agreement and as
Guarantee Trustee under the Guarantee. The Bank of New York
(Delaware) acts as the Delaware Trustee under the Trust
Agreement. See DESCRIPTION OF THE PREFERRED SECURITIES -
"Concerning the Property Trustee."

DESCRIPTION OF CERTAIN TERMS OF THE DEPOSITARY SHARES

In addition to terms described above under PROSPECTUS
SUMMARY - "Comparison of Preferred Securities and Depositary
Shares," the following terms apply to the Depositary Shares:

VOTING RIGHTS

Texas Utilities, as the only Holder of Common Stock of the
Company, has sole voting power, except as indicated below or as
otherwise required by law. If any four full quarterly dividends
on the Company's Preferred Stock, including either series of
Underlying Preferred, are in default, the Holders of shares of
all outstanding shares of the Preferred Stock become entitled, as
one class, to elect a majority of the Board of Directors, which
right does not terminate until full dividends have been provided
for all past periods. When entitled to vote, the Holders of the
Preferred Stock shall have one vote for each share held. No
Preferred Stock dividends are currently in default.

The Depositary for the Depositary Shares will endeavor
insofar as practicable to vote the Underlying Preferred in
accordance with the instructions of the Holders of the Depositary
Shares. It will vote those shares of Underlying Preferred as to
which it has received no instruction in conformity with the
instructions it has received from the majority of Holders of
Depositary Shares which have given instructions.

Without the consent of the Holders of at least two-thirds of
the total number of shares of Preferred Stock, the Company may
not:

(A) create or authorize any new stock ranking prior to
Preferred Stock as to dividends or in liquidation, dissolution,
winding up or distribution, or create or authorize any security
convertible into shares of any such stock; or

(B) amend, alter, change or repeal any of the express terms
of Preferred Stock then outstanding in a manner substantially
<PAGE>

prejudicial to the Holders thereof; provided, however, that if
such amendment, alteration, or change effects less than all
series of Preferred Stock, only the consent of the Holders of
two-thirds of the aggregate of the series so affected shall be
required.

In addition, without the consent of the Holders of a
majority of Preferred Stock, voting separately as a class, or if
Holders of one-third of Preferred Stock vote against such action,
the Company may not:

(A) issue additional shares of Preferred Stock or stock
ranking prior to or on a parity therewith, (1)(i) unless net
income (determined after provisions for taxes and depreciation)
available for the payment of all dividends for a period of twelve
consecutive calendar months within the fifteen calendar months
immediately preceding the issuance is at least 2 times the annual
dividend requirements on all outstanding shares of Preferred
Stock and stock ranking equal or prior thereto, including the
shares proposed to be issued, and (ii) unless the gross income
for said period (after provisions for taxes and depreciation)
available for the payment of interest is at least 1 1/2 times the
sum of the annual interest charges on all outstanding
indebtedness and the annual dividend requirements on all
outstanding shares of Preferred Stock and stock ranking equal or
prior thereto, including the shares proposed to be issued; (2)
unless the aggregate capital applicable to common stock and
surplus shall not be less than the aggregate capital applicable
to Preferred Stock and stock ranking on a parity therewith,
including the shares proposed to be issued; (3) unless for a
period of twelve consecutive months out of the immediately
preceding fifteen months net earnings, before income taxes,
available for the payment of interest shall have been at least 1 1/2
times the sum of the annual interest charges on indebtedness to
be outstanding immediately after the issuance of such shares and
the annual dividend requirement on Preferred Stock and stock
ranking equal or prior thereto, including the shares proposed to
be issued; or (4) if such issuance would bring the aggregate
stated value of all shares of Preferred Stock and stock ranking
equal or prior thereto to be then outstanding to an amount in
excess of the sum of the stated value of all outstanding stock
junior to Preferred Stock and the amount of the Company's
retained earnings; or

(B) create or assume any unsecured debt (other than certain
refunding debt) having a maturity of more than one year unless
for a period of twelve consecutive months out of the immediately
preceding fifteen months net earnings, before income taxes,
available for the payment of interest shall have been at least 2
times the annual interest charges on debt having a maturity of
more than one year to be then outstanding, or if the amount of
unsecured debt having a maturity of more than one year shall
thereupon exceed 25% of the Company's secured debt, capital stock
and retained earnings; or
<PAGE>

(C) purchase or redeem any stock junior to Preferred Stock,
except junior Preferred Stock at a price not more than the
current redemption price when there is no continuing default in
the payment of any dividend on Preferred Stock and except for any
purchase of stock junior to the Preferred Stock under any
employee benefit plan; or

(D) pay any dividend on any stock junior to Preferred Stock
which would reduce retained earnings to less than 1 1/2 times the
annual dividend requirement on Preferred Stock and stock ranking
equal or prior thereto.

The Articles of Incorporation of the Company limit the
payment of annual dividends on the common stock to (a) 50% of
current net income available for such dividends when the common
stock equity, as therein defined, is less than 20% of total
capitalization, as therein defined, or would by the dividend be
reduced to less than 20% of such total capitalization, or (b) 75%
of such net income when such equity is or by the declaration of
such dividend would become less than 25% but not less than 20% of
such total capitalization. The payment of such dividends is
unlimited when such equity is 25% or more of such total
capitalization, except when such dividends would bring such
equity within the limits specified in (a) and (b) above.

LIQUIDATION RIGHTS

In the event of any liquidation, dissolution or winding up
of the Company, the Underlying Preferred, pari passu with all
series of Preferred Stock then outstanding, shall have a
preference over the Company's common stock until an amount equal
to the then current liquidation price plus unpaid accumulated
dividends shall have been paid.

MISCELLANEOUS

The Underlying Preferred has no subscription rights,
conversion rights or preemptive rights.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

The following summary describes certain United States
federal income tax consequences, as of the date hereof, of the
ownership of Preferred Securities and the exchange of Depositary
Shares for Preferred Securities plus a cash component or for cash
only and represents the opinion of Reid & Priest LLP, counsel to
the Company, insofar as it relates to matters of law or legal
conclusions. Except where noted, it deals only with Preferred
Securities held as capital assets and acquired pursuant to the
Exchange Offer and does not deal with special situations, such as
those of dealers in securities or currencies, financial
institutions, life insurance companies, persons holding Preferred
Securities as a part of a hedging or conversion transaction or a
<PAGE>

straddle, or United States Holders (as defined herein) whose
"functional currency" is not the U.S. dollar or persons who are
not United States Holders. In addition, this discussion does not
address the tax consequences to persons who purchase Preferred
Securities other than pursuant to their initial issuance and
distribution. Furthermore, the discussion below is based upon
the provisions of the Internal Revenue Code of 1986, as amended
(Code), and regulations, rulings and judicial decisions
thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in federal income
tax consequences different from those discussed below.

ALL HOLDERS OF DEPOSITARY SHARES, INCLUDING PERSONS WHO ARE
NOT UNITED STATES HOLDERS, AND ALL PERSONS WHO PURCHASE PREFERRED
SECURITIES IN THE SECONDARY MARKET, ARE ADVISED TO CONSULT WITH
THEIR TAX ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES OF THE EXCHANGE OF DEPOSITARY SHARES FOR PREFERRED
SECURITIES AND CASH OR FOR CASH ONLY AND OF THE OWNERSHIP AND
DISPOSITION OF PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR
CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER
TAX LAWS.

UNITED STATES HOLDERS

As used herein, a "United States Holder" means a Holder that
is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof,
or an estate or trust the income of which is subject to United
States federal income taxation regardless of its source.

CLASSIFICATION OF TU ELECTRIC CAPITAL

Reid & Priest LLP, special counsel to the Company and TU
Electric Capital, is of the opinion that, under current law and
assuming full compliance with the terms of the Indenture and the
Declaration (and certain other documents), TU Electric Capital
will be classified as a "grantor trust" for federal income tax
purposes and will not be classified as an association taxable as
a corporation. Each Holder will be treated as owning an
undivided beneficial interest in the Junior Subordinated
Debentures. Accordingly, each Holder will be required to include
in its gross income the OID accrued with respect to its allocable
share of Junior Subordinated Debentures as described below.
Investors should be aware that the opinion of Reid & Priest LLP
does not address any other issue and is not binding on the
Internal Revenue Service or the courts.

Classification of the Junior Subordinated Debentures

Based on the advice of its counsel, the Company believes and
intends to take the position that the Junior Subordinated
Debentures will constitute indebtedness for United States federal
income tax purposes. No assurance can be given that such
<PAGE>

position will not be challenged by the Internal Revenue Service
or, if challenged, that such a challenge will not be successful.
By exchanging Depositary Shares for Preferred Securities, each
Holder covenants to treat the Junior Subordinated Debentures as
indebtedness and the Preferred Securities as evidence of an
indirect beneficial ownership in the Junior Subordinated
Debentures. The remainder of this discussion assumes that the
Junior Subordinated Debentures will be classified as indebtedness
of the Company for United States federal income tax purposes.

EXCHANGE OF DEPOSITARY SHARES FOR PREFERRED SECURITIES AND
CASH OR FOR CASH ONLY

The exchange of Depositary Shares either for Preferred
Securities plus a cash component or for cash alone pursuant to
the Exchange Offer will be a taxable transaction. In the event
of an exchange for Preferred Securities and cash, gain or loss
will be recognized in an amount equal to the difference between
the fair market value of the Preferred Securities at the time of
the exchange plus the cash received, including the Payment in
Lieu of Accumulated Dividends, and the exchanging Holder's tax
basis in the Depositary Shares exchanged therefor. In the event
of an exchange for cash only, gain or loss will be recognized in
an amount equal to the difference between the cash received and
the selling Holder's cash basis in the Depositary Shares
surrendered. In the case of a United States Holder who owns
(actually or constructively) solely Depositary Shares, or not
more than one percent of the Depositary Shares outstanding and
not more than one percent of any other class of the Company's
capital stock, any such gain recognized will be long-term capital
gain or loss if the Depositary Shares have been held for more
than one year as of such date. A United States Holder's
aggregate tax basis in the Preferred Securities will be equal to
the fair market value of the Preferred Securities at the time of
the exchange.

Holders of the Depositary Shares owning (actually or
constructively) more than one percent of any class of the
Company's stock are advised to consult their own tax advisors as
to the income tax consequences of exchanging Preferred Securities
for Depositary Shares.

ORIGINAL ISSUE DISCOUNT

Under the terms of the Junior Subordinated Debentures, the
Company has the option to defer payments of interest for up to 20
consecutive quarterly distribution payment periods and to pay as
a lump sum at the end of such period all of the interest that has
accrued during such period. During any such Extension Period,
distributions on the Preferred Securities will also be deferred.
Because of this option to extend the interest payment periods,
all of the stated distribution payments on the Preferred
Securities will be treated as OID. As a result, United States
Holders will be required to accrue interest income even if they
<PAGE>

use the cash method of tax accounting. In the event of an
Extension Period, a United States Holder will be required to
continue to include OID in income on an economic accrual basis
notwithstanding that TU Electric Capital will not make any
distribution payments on the Preferred Securities.

In addition, the amount of OID will be increased or
decreased if the "issue price" of the Junior Subordinated
Debentures (fair market value of the Preferred Securities at the
time of the exchange, which will not include the additional cash
component and the Payment in Lieu of Accumulated Dividends ) is
less than or greater than their stated principal amount. In the
event that the issue price of the Junior Subordinated Debentures
is less than their stated principal amount, the Treasury
Regulations may be read to require a recalculation of the amount
of OID for each period that the Company does not exercise its
right to extend the interest payment. This recalculation could
result in minor adjustments to the amount of OID taxable to the
Holders for such period.

RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON
LIQUIDATION OF TU ELECTRIC CAPITAL

Under certain circumstances, as described under the caption
DESCRIPTION OF THE PREFERRED SECURITIES - "Tax Event Distribution
or Redemption," Junior Subordinated Debentures may be distributed
to Holders of Preferred Securities in exchange for the Preferred
Securities and in liquidation of TU Electric Capital. Under
current law, for United States federal income tax purposes, such
a distribution would be treated as a non-taxable event to each
United States Holder, and each United States Holder would receive
an aggregate tax basis in the Junior Subordinated Debentures
equal to such Holder's aggregate tax basis in its Preferred
Securities. A United States Holder's holding period for the
Junior Subordinated Debentures received in liquidation of TU
Electric Capital would include the period during which such
Holder held the Preferred Securities.

Under certain circumstances, as described under the caption
DESCRIPTION OF THE PREFERRED SECURITIES - "Redemption of
Preferred Securities," Junior Subordinated Debentures may be
redeemed for cash and the proceeds of such redemption distributed
to Holders of Preferred Securities in redemption of the Preferred
Securities. Under current law for United States federal income
tax purposes, such a redemption would constitute a taxable
disposition of the redeemed Preferred Securities, and a United
States Holder would recognize gain or loss as if such Holder had
sold such redeemed Preferred Securities. See "Sale, Exchange and
Retirement of the Preferred Securities."

SALE, EXCHANGE AND RETIREMENT OF THE PREFERRED SECURITIES
<PAGE>

Upon the sale, exchange or retirement of Preferred
Securities, a United States Holder will recognize gain or loss
equal to the difference between the amount realized upon the
sale, exchange or retirement and such Holder's adjusted tax basis
in the Preferred Securities. A United States Holder's adjusted
tax basis in Preferred Securities will, in general, be the United
States Holder's initial basis therein, increased by OID or market
discount previously included in income by the United States
Holder and reduced by any amortized premium and any cash payments
on the Preferred Securities. Except with respect to market
discount, such gain or loss will be capital gain or loss and will
be long-term capital gain or loss if at the time of sale,
exchange or retirement, the Preferred Securities have been held
for more than one year. Under current law, net capital gains of
individuals are, under certain circumstances, taxed at lower
rates than items of ordinary income. The deductibility of
capital losses is subject to limitations.

BACKUP WITHHOLDING AND INFORMATION REPORTING

In general, information reporting requirements will apply to
(i) certain payments of liquidation preference or distributions
paid on the Preferred Securities, (ii) the gross proceeds from
the exchange of Depositary Shares either for Preferred Securities
plus a cash component (including the Payment in Lieu of
Accumulated Dividends) or for cash only pursuant to the Exchange
Offer, and (iii) the proceeds of sale of the Preferred Securities
made to United States Holders other than certain exempt
recipients (such as corporations). A 31% backup withholding tax
will apply to payments described in the preceding sentence if the
United States Holder fails to provide a taxpayer identification
number or certification of exempt status or fails to report in
full dividend and interest income. It is anticipated that
persons who hold Preferred Securities as nominees for beneficial
holders will report the required tax information to beneficial
holders on Form 1099.

Any amounts withheld under the backup withholding rules will
be allowed as a refund or a credit against such Holder's United
States federal income tax liability provided the required
information is furnished to the IRS.

EXPERTS

The financial statements and financial statement schedules
included in the 1994 10-K, incorporated herein by reference, have
been audited by Deloitte & Touche LLP, Independent Auditors, as
stated in their report included in such 1994 10-K, and have been
incorporated by reference herein in reliance upon such report
given upon the authority of that firm as experts in accounting
and auditing.
<PAGE>

With respect to the unaudited interim financial information
included in the Company's Quarterly Reports on Form 10-Q
incorporated herein by reference, Deloitte & Touche LLP has
applied limited procedures in accordance with professional
standards for reviews of such information. However, as stated in
any of their reports that are included in the Company's Quarterly
Reports on Form 10-Q, incorporated herein by reference, they did
not audit and they do not express an opinion on that interim
financial information. Deloitte & Touche LLP is not subject to
the liability provisions of Section 11 of the 1933 Act for any of
its reports on such unaudited interim financial information
because those reports are not "reports" or a "part" of the
Registration Statement filed under the 1933 Act with respect to
the Preferred Securities prepared or certified by an accountant
within the meaning of Sections 7 and 11 of the 1933 Act.

The statements made in the Company's latest Annual Report on
Form 10-K under Part I, Item 1 - Business-Regulation and Rates
and Environmental Matters, incorporated herein by reference, have
been reviewed by Worsham, Forsythe & Wooldridge, L.L.P., Dallas,
Texas, General Counsel for the Company. All of such statements
are set forth or incorporated by reference herein in reliance
upon the opinion of that firm given upon their authority as
experts. At June 30, 1995, members of the firm of Worsham,
Forsythe & Wooldridge, L.L.P. owned approximately 47,000 shares
of the common stock of Texas Utilities. Statements as to United
States federal income taxation under CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES herein have been passed upon for
the Company and TU Electric Capital by Reid & Priest LLP, New
York, New York, of counsel to the Company.

LEGALITY

Certain matters of Delaware law relating to the validity of
the Preferred Securities, the enforceability of the Trust
Agreement and the creation of TU Electric Capital are being
passed upon by Richards, Layton & Finger, Special Delaware
counsel for the Company and TU Electric Capital. The legality of
the other securities offered hereby will be passed upon for the
Company and TU Electric Capital by Worsham, Forsythe &
Wooldridge, L.L.P. and by Reid & Priest LLP, and for the
Underwriters by Winthrop, Stimson, Putnam & Roberts, New York,
New York. However, all matters pertaining to incorporation of
the Company and all other matters of Texas law will be passed
upon only by Worsham, Forsythe & Wooldridge, L.L.P.

The Exchange Agent is:
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.

BY HAND: BY OVERNIGHT COURIER:
Office Hours: 9:00 a.m. 5:00 Chemical Mellon Shareholder
p.m. Services, L.L.C.
(New York City Time)
<PAGE>

Chemical Mellon Shareholder Reorganization Department
Services, L.L.C. 85 Challenger Road
Reorganization Department Ridgefield Park, New Jersey
120 Broadway 07660
13th Floor
New York, New York 10271

BY MAIL:
(registered or certified mail recommended)
Chemical Mellon Shareholder Services, L.L.C.
Reorganization Department
P.O. Box 817
Midtown Station
New York, New York 10018

Facsimile Transmission
(201) 296-4293
(For Eligible Institutions Only)

Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(201) 296-4209

Any questions or requests for assistance or additional
copies of this Prospectus, Letters of Transmittal and the
Notice of Guaranteed Delivery may be directed to the
Information Agent or the Dealer Managers at their respective
telephone numbers and locations set forth below. You may also
contact your broker, dealer, commercial bank or trust company
or other nominee for assistance concerning the Exchange Offer.

The Information Agent is:
D.F. KING & CO., INC.

77 Water Street
20th Floor
New York, New York 10005

Banks and Brokers call collect:
(212) 269-5550
All others call toll-free:
(800) 697-6974

The Dealer Managers for the Exchange Offer are:

Merrill Lynch & Goldman, Sachs & Lehman Brothers Smith Barney
Co. Co. Inc.
PART II.

INFORMATION NOT REQUIRED IN PROSPECTUS
<PAGE>

ITEM 20. Indemnification of Directors and Officers.

Article IX of the Restated Articles of Incorporation of the
Company provides as follows:

"The Corporation shall reimburse or indemnify any
former, present or future director, officer or employee of
the Corporation, or any person who may have served at its
request as a director, officer or employee of another
corporation, or any former, present or future director,
officer or employee of the Corporation who shall have served
or shall be serving as an administrator, agent or fiduciary
for the Corporation or for another corporation at the
request of the Corporation (and his heirs, executors and
administrators) from and against all expenses and
liabilities incurred by him or them, or imposed on him or
them, including, but not limited to, judgments, settlements,
court costs and attorneys' fees, in connection with, or
arising out of, the defense of any action, suit or
proceeding in which he may be involved by reason of his
being or having been such director, officer or employee,
except with respect to matters as to which he shall be
adjudged in such action, suit or proceeding to be liable
because he did not act in good faith, or because of
dishonesty or conflict of interest in the performance of his
duty.

"No former, present or future director, officer or
employee of the Corporation (or his heirs, executors and
administrators) shall be liable for any act, omission, step
or conduct taken or had in good faith, which is required,
authorized or approved by any order or orders issued
pursuant to the Public Utility Holding Company Act of 1935,
the Federal Power Act, or any other federal or state statute
regulating the Corporation or its subsidiaries, or any
amendments to any thereof. In any action, suit or proceeding
based on any act, omission, step or conduct, as in this
paragraph described, the provisions hereof shall be brought
to the attention of the court. In the event that the
foregoing provisions of this paragraph are found by the
court not to constitute a valid defense, each such director,
officer or employee (and his heirs, executors and
administrators) shall be reimbursed for, or indemnified
against, all expenses and liabilities incurred by him or
them, or imposed on him or them, including, but not limited
to, judgments, settlements, court costs and attorneys' fees,
in connection with, or arising out of, any such action, suit
or proceeding based on any act, omission, step or conduct
taken or had in good faith as in this paragraph described.

"The foregoing rights shall not be exclusive of other
rights to which any such director, officer or employee (or
his heirs, executors and administrators) may otherwise be
entitled under any bylaw, agreement, vote of shareholders or
<PAGE>

otherwise, and shall be available whether or not the
director, officer or employee continues to be a director,
officer or employee at the time of incurring such expenses
and liabilities. In furtherance, and not in limitation of
the foregoing provisions of this Article IX, the Corporation
may indemnify and insure any such persons to the fullest
extent permitted by the Texas Business Corporation Act, as
amended from time to time, or the laws of the State of
Texas, as in effect from time to time."

Article 2.02-1 of the Texas Business Corporation Act permits
the Company, in certain circumstances, to indemnify any present
or former director, officer, employee or agent of the Company
against judgments, penalties, fines, settlements and reasonable
expenses incurred in connection with a proceeding in which any
such person was, is or is threatened to be, made a party by
reason of holding such office or position, but only to a limited
extent for obligations resulting from a proceeding in which the
person is found liable on the basis that a personal benefit was
improperly received or in circumstances in which the person is
found liable in a derivative suit brought on behalf of the
Company.

Article X of the Articles of Incorporation of the Company
provides as follows:

"A director of the Corporation shall not be liable to
the Corporation or its shareholders for monetary damages for
any act or omission in the director's capacity as a
director, except that this provision does not eliminate or
limit the liability of a director for:

(a) a breach of a director's duty of loyalty to
the Corporation or its shareholders;

(b) an act or omission not in good faith that
constitutes a breach of duty of a director to the
Corporation or an act or omission that involved
intentional misconduct or a knowing violation of the
law;

(c) a transaction from which a director received
an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the
director's office; or

(d) an act or omission for which the liability of
a director is expressly provided for by statute.

If the laws of the State of Texas are amended to authorize
action further eliminating or limiting the personal
liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the
fullest extent permitted by such laws as so amended. Any
<PAGE>

repeal or modification of this Article X shall not adversely
affect any right of protection of a director of the
Corporation existing at the time of such repeal or
modification."

Section 18 of the Company's bylaws provides as follows:

"Section 18. Insurance, Indemnification and Other
Arrangements. Without further specific approval of the
shareholders of the Corporation, the Corporation may
purchase, enter into, maintain or provide insurance,
indemnification or other arrangements for the benefit of any
person who is or was a director, officer, employee or agent
of the Corporation or is or was serving another entity at
the request of the Corporation as a director, officer,
employee, agent or otherwise, to the fullest extent
permitted by the laws of the State of Texas, including
without limitation Art. 2.02-1 of the Texas Business
Corporation Act or any successor provision, against any
liability asserted against or incurred by any such person in
any such capacity or arising out of such person's service in
such capacity whether or not the Corporation would otherwise
have the power to indemnify against any such liability under
the Texas Business Corporation Act. If the laws of the State
of Texas are amended to authorize the purchase, entering
into, maintaining or providing of insurance, indemnification
or other arrangements in the nature of those permitted
hereby to a greater extent than presently permitted, then
the Corporation shall have the power and authority to
purchase, enter into, maintain and provide any additional
arrangements in such regard as shall be permitted from time
to time by the laws of the State of Texas without further
approval of the shareholders of the Corporation. No repeal
or modification of such laws or this Section 18 shall
adversely affect any such arrangement or right to
indemnification existing at the time of such repeal or
modification."

The Company has entered into agreements with its officers
and directors which provide, among other things, for their
indemnification by the Company to the fullest extent permitted by
Texas law, unless a final adjudication establishes that the
indemnitee's acts were committed in bad faith, were the result of
active and deliberate dishonesty or that the indemnitee
personally gained a financial profit to which the indemnitee was
not legally entitled. These agreements further provide, under
certain circumstances, for the advancement of expenses and the
implementation of other arrangements for the benefit of the
indemnitee.

The 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.
<PAGE>

Directors and officers of the Company also have insurance which
insures them against certain other liabilities and expenses.
<PAGE>

ITEM 21. Exhibits.

PREVIOUSLY FILED*
______________________
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
_______ _______ _______

1(a) -- Form of Dealer Manager Agreement.
3(a) 0-11442 3(a) -- Restated Articles of
Incorporation of the
Company
Form 10-K
1993
3(b) 33-64694 4(c) -- Bylaws of the Company,
as amended.

**3(c) -- Trust Agreement relating to the
Preferred Securities.
4(a) -- Form of Amended and Restated Trust
Agreement relating to the Preferred
Securities.
4(b) -- Form of Indenture relating to the
Junior Subordinated Debentures.
4(c) -- Form of Guarantee Agreement.
4(d) -- Form of Agreement as to Expenses
and Liabilities.
4(e) -- Form of Officers' Certificate
establishing Debentures.
4(f) -- Form of Preferred Securities.
4(g) -- Form of Letter of Transmittal
**5(a) -- Opinion of Worsham, Forsythe &
Wooldridge, L.L.P., General Counsel
for the Company.
**5(b)
and 8 -- Opinion of Reid & Priest LLP, of
counsel to the Company.
**5(c) -- Opinion of Richards, Layton &
Finger, Special Delaware Counsel to
the Company and TU Electric
Capital.
**12(a) -- Computation of Ratio of Earnings to
Fixed Charges of the Company.
12(b) -- Computation of Ratio of Earnings to
Fixed Charges and Preferred
Dividends of the Company.
**15 -- Letter of Deloitte & Touche LLP
regarding unaudited condensed
interim financial information.
23(a) -- Independent Auditors' Consent.
<PAGE>
**23(b) -- Consents of Worsham, Forsythe &
Wooldridge, L.L.P., Reid & Priest
LLP and Richards, Layton & Finger
are contained in Exhibits 5(a),
5(b) and 5(c), respectively.
**24 -- Power of Attorney.
**25(a) -- Statement on Form T-1 of The Bank
of New York relating to Amended and
Restated Trust Agreement.
**25(b) -- Statement on Form T-1 of The Bank
of New York relating to Indenture.
**25(c) -- Statement on Form T-1 of The Bank
of New York relating to Guarantee
Agreement.
99(a) -- Form of Exchange Agent Agreement.
99(b) -- Form of letter to Brokers, Dealers,
Commercial Banks, Trust Companies
and Other Nominees.
99(c) -- Form of letter from Brokers,
Dealers, Commercial Banks, Trust
Companies and Other Nominees to
their clients.
99(d) -- Form of Notice of Guaranteed
Delivery.
99(e) -- Form of Guidelines for
Certification of Taxpayer
Identification Number on Substitute
Form W-9.
99(f) -- Form of Questions and Answers
relating to the Offer.
99(g) -- Form of Notice of Offer to
Exchange.

-----------------------
*Incorporated herein by reference.
**Previously Filed.

ITEM 22. Undertakings.

The undersigned registrant hereby undertakes:

(1) That, for purposes of determining any
liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in this
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.
<PAGE>

(2) That, for purposes of determining any
liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of
this registration statement as of the time it was
declared effective.

(3) That, for the purpose of determining any
liability under the Securities Act of 1933, each post-
effective amendment that contains a form of prospectus
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.

(4) That, insofar as indemnification for
liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions
described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the
registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>

SIGNATURES

THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO THE
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 7TH DAY OF NOVEMBER, 1995.

Texas Utilities Electric Company

By /s/ Robert J. Reger, Jr.

__________________________________
Robert J. Reger, Jr.
(Attorney-in-Fact)

This amendment to the registration statement has been signed
below by the following persons in the capacities and on the date
indicated.

Signatures Title Date

/s/ Erle Nye*
------------------------------- November 7,
1995
(Erle Nye, Chairman of the Board Principal Executive
and Chief Executive) Officer and Director

/s/ H. Dan Farell*
-------------------------------- Principal FinancialNovember 7,
1995
(H. Dan Farell, Senior Vice President) Officer and
Director

s/ Marc D. Moseley*
-------------------------------- Principal AccountingNovember 7,
1995
(Marc D. Moseley, Controller) Officer

/s/ T. L. Baker*
--------------------------------- Director
November 7, 1995
(T. L. Baker)

/s/ J. S. Farrington*
<PAGE>

--------------------------------- Director
November 7, 1995
(J. S. Farrington)

/s/ H. Jarrell Gibbs*
--------------------------------- Director
November 7, 1995
(H. Jarrell Gibbs) Director

/s/ John U. Martin*
--------------------------------- Director
November 7, 1995
(John U. Martin)

/s/ Michael D. Spence*
--------------------------------- Director
November 7, 1995
(Michael D. Spence)

/s/ W. M. Taylor*
--------------------------------- Director
November 7, 1995
(W. M. Taylor)

/s/ E. L. Watson*
--------------------------------- Director
November 7, 1995
(E. L. Watson

* By/s/ Robert J. Reger, Jr.
----------------------------
Robert J. Reger, Jr.
(Attorney-in-Fact)

SIGNATURES

TU ELECTRIC CAPITAL I
<PAGE>

By: /S/ROBERT J. REGER,
JR.
----------------------------
--------- ROBERT
J. REGER, JR.
(ATTORNEY-IN-FACT)
<PAGE>

(ATTORNEY-IN-FACT)

<PAGE>

EXHIBIT INDEX

1(a) -- Form of Dealer Manager Agreement.
4(a) -- Form of Amended and Restated Trust
Agreement relating to the Preferred
Securities.
4(b) -- Form of Indenture relating to the
Junior Subordinated Debentures.
4(c) -- Form of Guarantee Agreement.
4(d) -- Form of Agreement as to Expenses
and Liabilities.
4(e) -- Form of Officers' Certificate
establishing Debentures.
4(f) -- Form of Preferred Securities.
4(g) -- Form of Letter of Transmittal
12(b) -- Computation of Ratio of Earnings to
Fixed Charges and Preferred Dividends
of the Company
23(a) -- Independent Auditors' Consent.
99(a) -- Form of Exchange Agent Agreement.
99(b) -- Form of letter to Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.
99(c) -- Form of letter from Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees to their clients.
99(d) -- Form of Notice of Guaranteed Delivery.
99(e) -- Form of Guidelines for Certification of
Taxpayer Identification Number on Substitute
Form W-9.
99(f) -- Form of Questions and Answers relating to the
Offer.
99(g) -- Form of Notice of Offer to Exchange.
<PAGE>

Exhibit 1(a)

DEALER MANAGER AGREEMENT

November __, 1995

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch World Headquarters
South Tower
World Financial Center
New York, New York 10281-1329

GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10005

LEHMAN BROTHERS INC.
3 World Financial Center
New York, New York 10285

SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

TU Electric Capital I (the "Trust"), a statutory
business trust organized under the Delaware Business Trust Act
(the "Delaware Act"), proposes to issue its Trust Originated
Preferred Securities (the "Preferred Securities") in exchange for
up to $350,230,874 principal amount of Texas Utilities Electric
Company (the "Company") Junior Subordinated Debentures, due
September 30, 2030 ("Debentures"). The Company proposes to offer
to exchange for any and all of (A) its 7,659,300 outstanding
Depositary Shares, Series A, each representing 1/4 share of $7.50
Cumulative Preferred Stock ("$1.875 Depositary Shares") and (B)
its 6,613,700 outstanding Depositary Shares, Series B, each
representing 1/4 share of $7.22 Cumulative Preferred Stock
("$1.805 Depositary Shares", hereinafter from time to time,
together with the $1.875 Depositary Shares, referred to as the
"Depositary Shares") Preferred Securities with a cash component
applicable to the series of Depositary Shares to be exchanged or
cash only in an amount applicable to the series of Depositary
Shares to be exchanged. The Preferred Securities will be
guaranteed by the Company to the extent described in the
Prospectus (as hereinafter defined) (the "Guarantee"). The offer
to exchange Preferred Securities plus a cash component or cash
only for Depositary Shares described above is herein referred to
as the "Exchange Offer" and any exchange of Preferred Securities
for Depositary Shares pursuant to the Exchange Offer is herein
referred to as an "Exchange".

Each of the Company and the Trust hereby confirms its
agreement with Merrill Lynch & Co. of Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), Goldman , Sachs &
Co. ("Goldman"), Lehman Brothers Inc. ("Lehman") and Smith Barney
Inc. ("Smith Barney", together with Merrill Lynch, Goldman and
Lehman, the "Co-Dealer Managers") as follows:

1. Registration Statement, Prospectus and Offering
-----------------------------------------------
Materials. The Company and the Trust have prepared and filed
---------
with the Securities and Exchange Commission (the "Commission"),
under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder
(collectively, the "Securities Act"), a registration statement on
Form S-4 covering the registration of the Preferred Securities,
the Guarantee and the Debentures, including the related
preliminary prospectus (the "prospectus"), and will prepare and
file, on or prior to the effective date of such registration
statement, amendments to such registration statement, including a
final prospectus. Such registration statement, including the
exhibits thereto and any documents incorporated by reference
therein, as amended at the time it becomes effective or as
thereafter amended or supplemented from time to time, is herein
called the "Registration Statement". The final prospectus
included in the Registration Statement (including any documents
incorporated in the prospectus by reference) is herein called the
"Prospectus", except that if the final prospectus furnished to
the Co-Dealer Managers for use in connection with the Exchange
Offer differs from the prospectus set forth in the Registration
Statement (whether or not such prospectus is required to be filed
pursuant to Rule 424(b)), the term "Prospectus" shall refer to
the final prospectus furnished to the Co-Dealer Managers for such
use. The terms "supplement" and "amendment" or "amend" as used
herein with respect to the Prospectus shall include all documents
deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Prospectus and prior to the
termination of the Exchange Offer by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

The Registration Statement, Prospectus and the related
letters from the Co-Dealer Managers to securities brokers,
dealers, commercial banks, trust companies and other nominees,
letters to beneficial owners of Depositary Shares, letters of
transmittal (the "Letters of Transmittal"), notices of guaranteed
delivery (the "Notices of Guaranteed Delivery") and any newspaper
announcements, press releases and other offering materials and
information the Company may use or prepare, approve or authorize
for use in connection with the Exchange Offer, as amended or
supplemented from time to time, are herein collectively referred
to as the "Offering Materials".

2. Exchange Offer; Agreement to Act as Co-Dealer Managers.
------------------------------------------------------
(a) The Company and the Trust intend to commence the Exchange
Offer as soon as practicable after the Registration Statement
becomes effective under the Securities Act by publicly announcing
its commencement and by mailing, or causing to be mailed on its
behalf, copies of the Prospectus, the related Letters of
Transmittal and such of the other Offering Materials as is
required or as the Company elects to each holder of Depositary
Shares (the date of the commencement of such distribution being
herein called the "Commencement Date").

(b) The Company and the Trust hereby retain the
Co-Dealer Managers to advise them with respect to the terms
and timing of the Exchange Offer and to assist them in the
preparation of the Offering Materials and retain and
authorize the Co-Dealer Managers to act as co-dealer
managers and to assist the Company with the solicitation of
Exchanges (each a "Solicitation" and collectively the
"Solicitations"). On the basis of the representations,
warranties and agreements of the Company and the Trust
herein contained and subject to and in accordance with the
terms and conditions hereof and of the Offering Materials,
the Co-Dealer Managers agree to advise the Company and the
Trust with respect to the terms and timing of the Exchange
Offer and to act as co-dealer managers in connection with
the Exchange Offer and to assist the Company with the
Solicitations. The Co-Dealer Managers agree to use their
reasonable best efforts to solicit Exchanges.

(c) The Company shall furnish the Co-Dealer Managers,
or cause the transfer agent or registrar for the Depositary
Shares (respectively, the "Transfer Agent" and "Registrar")
to furnish the Co-Dealer Managers, as soon as practicable
after the date hereof (to the extent not previously
furnished), with cards or lists in reasonable quantities or
copies thereof showing the names of persons who were the
holders of record or, to the extent available to the
Company, the beneficial owners of the Depositary Shares as
of a recent date, together with their addresses, and the
number of shares of Depositary Shares held by them.
Additionally, the Company shall use its best efforts to
update, or to cause the Transfer Agent or Registrar to
update, such information from time to time during the term
of this Agreement as may be reasonably requested by the
Co-Dealer Managers. Except as otherwise provided herein,
the Co-Dealer Managers agree to use such information only in
connection with the Solicitations. The Co-Dealer Managers
shall act hereunder as independent contractors and nothing
herein contained shall make the Co-Dealer Managers agents of
the Trust or the Company in connection with any
Solicitation. Nothing contained in this Agreement shall
constitute the Co-Dealer Managers partners of or joint
venturers with the Trust or the Company.

(d) The Trust and the Company authorize the Co-Dealer
Managers to use the Offering Materials in connection with
the Solicitations and for such period of time as any
Offering Materials are required by law to be delivered in
connection therewith. The Co-Dealer Managers shall not have
any obligation to cause any Offering Materials to be
transmitted generally to the holders of the Depositary
Shares. The Co-Dealer Managers agree not to give any
written information and not to make any representations to
holders of the Depositary Shares in connection with any
Solicitation other than as contained in the Offering
Materials.

(e) The Trust and the Company authorize the Co-Dealer
Managers to communicate with any information agent (the
"Information Agent") or exchange agent (the "Exchange
Agent") appointed by the Company to act in such capacity in
connection with the Exchange Offer with respect to matters
relating to the Exchange Offer.

(f) The Trust and the Company agree that any reference
to any Co-Dealer Manager in any Offering Materials or in any
newspaper announcement or press release or other document or
communication is subject to such Co-Dealer Manager's prior
consent, which consent shall not be unreasonably withheld.

3. Compensation. (a) The Company hereby agrees to pay to
------------
the Co-Dealer Managers for services rendered and to be rendered
by them in connection with the Exchange Offer an aggregate fee
(the "Management Fee") equal to $.125 per share of Depositary
Shares accepted in the Exchange Offer. The Management Fee shall
be paid only if the Exchange Offer is consummated, and shall be
paid within one week of the consummation of the Exchange Offer.
In addition, the Company agrees to reimburse each Co-Dealer
Manager directly for all of its reasonable out-of-pocket
expenses, including, without limitation, the reasonable fees and
expenses of Winthrop, Stimson, Putnam & Roberts ("Counsel for the
Co-Dealer Managers"). Fees, if any, related to all other
transactions with respect to the Depositary Shares not
contemplated hereby will be negotiated in good faith by the
parties hereto at the time thereof.

(b) The Company agrees to pay, or cause to be paid to,
each soliciting dealer (including any Co-Dealer Manager
acting as a soliciting dealer) whose name has been inserted
in the space provided in the Letter of Transmittal for that
purpose a fee (the "Soliciting Dealer Fee") equal to $.50
per Depositary Share validly tendered, accepted by the
Company and exchanged for Preferred Securities plus cash or
$.375 per Depositary Share validly tendered, accepted by the
Company and exchanged for cash only, in each case pursuant
to the Exchange Offer; provided, however, that no such fee
shall be paid with respect to Depositary Shares tendered,
directly or indirectly, by soliciting dealers for their own
account and such fee shall not be remitted, in whole or in
part, to the beneficial owner of such Depositary Shares.
The Soliciting Dealer Fee shall be payable to the soliciting
dealers within one week of the consummation of the Exchange
Offer with respect to both series.

4. Certain Covenants of the Trust and the Company. Each
----------------------------------------------
of the Company and the Trust jointly and severally covenants with
the Co-Dealer Managers:

(a) To use its best efforts to cause the Registration
Statement, including any post-effective amendment thereto,
to become effective and will notify the Co-Dealer Managers
immediately and, if requested by any Co-Dealer Manager, will
confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall have become
effective, or any supplement to the Prospectus or any
amended Prospectus or any amended or additional Offering
Materials shall have been filed, (ii) of the receipt of any
comments from the Commission relating to the Exchange Offer,
(iii) of any request by the Commission to amend the
Registration Statement or amend or supplement the Prospectus
or the other Offering Materials or for additional
information relating to the Exchange Offer and (iv) of
(A) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement
or (B) the issuance by the Commission of any order
preventing or suspending the use of any of the Offering
Materials or (C) the suspension of the qualification of the
Preferred Securities for offering or sale in connection with
the Exchange Offer in any jurisdiction, (D) the institution
or threatening of any proceedings for any of such purposes
or (E) the occurrence of any event which could cause the
Company to withdraw, rescind, terminate or modify the
Exchange Offer or would permit the Company to exercise any
right not to accept the Depositary Shares tendered pursuant
to the Exchange Offer. The Company and the Trust will use
their reasonable best efforts to prevent the issuance of any
such stop order, the issuance of any order preventing or
suspending such use and the suspension of any such
qualification and, if any such order is issued or
qualification suspended, to obtain the lifting of such order
or suspension at the earliest practicable time.

(b) Prior to the termination of the Exchange Offer,
before amending or supplementing the Registration Statement
or the Prospectus, to furnish copies of drafts to, and
consult with, the Co-Dealer Managers and their counsel
within a reasonable time in advance of filing with the
Commission of any amendment or supplement to the
Registration Statement, the Prospectus or the other Offering
Materials. Neither the Company nor the Trust shall file any
such amendment or supplement to which Counsel for the
Co-Dealer Managers shall reasonably object; provided,
--------
however, that the foregoing shall not apply to any of the
-------
Company's filings with the Commission required to be filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, copies of which such filings the Company will
cause to be delivered to each Co-Dealer Manager promptly
after being transmitted for filing with the Commission.

(c) To furnish promptly to each Co-Dealer Manager,
without charge, one signed copy of the Registration
Statement, all amendments thereto and any other filing with
the Commission in connection with the Exchange Offer,
whether filed before or after the Registration Statement
becomes effective.

(d) To furnish promptly to each Co-Dealer Manager,
without charge, from time to time until the effective date
of the Registration Statement, as many copies of each
preliminary prospectus as the Co-Dealer Managers may
reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the Securities
Act and the Exchange Act. The Company will furnish promptly
to each Co-Dealer Manager, without charge, as soon as the
Registration Statement shall have become effective and
during the period mentioned in the second sentence of
Section 4(e) below such number of copies of the Prospectus
and the other Offering Materials (as supplemented or
amended) as such Co-Dealer Manager may reasonably request
and will cause all amendments and supplements filed with the
Commission to be distributed to holders of Depositary Shares
as may be required by the Securities Act and the Exchange
Act.

(e) To comply in all material respects with the
Securities Act, the Exchange Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), in
connection with the Offering Materials, the Exchange Offer
and the transactions contemplated hereby and thereby, as
applicable. If at any time when the Prospectus is required
by the Securities Act or Exchange Act to be delivered in
connection with any Solicitation or Exchange any event shall
occur or condition shall exist as a result of which it is
necessary, in the opinion of Counsel for the Co-Dealer
Managers or counsel for the Company, to amend the
Registration Statement or amend or supplement the Prospectus
or any other Offering Materials in order that the Prospectus
or such other Offering Materials will not include an untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements in the
Prospectus or such other Offering Materials, in the light of
the circumstances under which they were made, not misleading
or if, in the opinion of either such counsel, it shall be
necessary to amend the Registration Statement or amend or
supplement the Prospectus or any other Offering Materials to
comply with the requirements of the Securities Act or
Exchange Act, the Trust will promptly prepare, file with the
Commission, subject to Section 4(b) of this Agreement, and
furnish, at its own expense, to each Co-Dealer Manager and
to the dealers (whose names and address will be furnished to
the Company by the Co-Dealer Managers) to which Preferred
Securities may have been exchanged, such amendment or
supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement
or the Prospectus or such other Offering Materials comply
with such requirements.

(f) To endeavor, in cooperation with the Co-Dealer
Managers, to qualify the Preferred Securities for offering
and sale in connection with the Exchange Offer under the
applicable securities or Blue Sky laws of such jurisdictions
as the Company and the Trust may elect and to maintain such
qualifications in effect for such time as may be required
for the consummation of the Exchange Offer; provided,
--------
however, that neither the Company nor the Trust shall be
-------
obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not
otherwise so subject or to meet any other requirements
deemed by the Company or the Trust to be unduly burdensome;
provided further that the Co-Dealer Managers shall not be
-------- -------
obligated to solicit tenders in jurisdictions where the
Preferred Securities are not qualified for offer and sale.
The Company and the Trust will file such statements and
reports as may be required by the laws of each jurisdiction
in which the Preferred Securities have been qualified as
above provided.

(g) To make generally available to its security
holders as soon as practicable an earnings statement of the
Company covering a twelve-month period beginning on the
first day of the first full fiscal quarter after the date of
this Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act.

(h) To use its best efforts to effect the listing of
the Preferred Securities on the New York Stock Exchange
("NYSE"), subject to official notice of issuance, as soon as
practicable after the date hereof.

(i) To timely file any report or other document
required to be filed by the Company or the Trust with the
Commission pursuant to Section 13, 14 or 15 of the Exchange
Act during the period of time referred to in the second
sentence of Section 4(e) hereof.

(j) To pay all costs and expenses incurred in
connection with the performance of its obligations in
connection with this Agreement and the Solicitations
including, without limitation, (i) the preparation, printing
and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and
as amended, the preliminary prospectuses, the Prospectus and
the other Offering Materials and any amendments or
supplements to any of the foregoing, and the cost of
furnishing copies thereof to the Co-Dealer Managers,
(ii) the preparation and distribution of this Agreement,
certificates for the Preferred Securities and any Blue Sky
surveys (including counsel fees not to exceed $5,000) and
the printing of certificates for the Preferred Securities,
(iii) the distribution of the Offering Materials to the
holders of the Depositary Shares, (iv) the fees and
disbursements of counsel to the Company and the Trust,
Counsel for the Co-Dealer Managers and the Company's and the
Trust's accountants, (v) the qualification of the Preferred
Securities under the applicable securities laws in
accordance with Section 4(f) and any filing for review of
the Exchange Offer with the NASD (including filing fees and
fees and disbursements of Counsel for the Co-Dealer Managers
in connection with such filing with the NASD), (vi) the fees
and expenses of the Transfer Agent, the Registrar, the
Trustees of the Trust (the "Trustees"), the Indenture
Trustee (as defined herein), the Information Agent and the
Exchange Agent and (vii) all other costs and expenses
incident to the Solicitations incurred by the Trust and the
Company and its subsidiaries. The Company agrees to pay all
of the aforementioned costs and expenses whether or not the
Exchange Offer is consummated.

(k) To advise or cause the Exchange Agent to advise
the Co-Dealer Managers at 5:00 P.M., New York City time, or
as promptly as practicable thereafter, daily (or more
frequently if requested), by telephone or facsimile
transmission, as of 4:00 P.M. on such day with respect to
Depositary Shares of each series that have been tendered as
follows: (i) the number of Depositary Shares of each series
validly tendered represented by certificates physically held
by the Exchange Agent (or for which the Exchange Agent has
received confirmation of receipt of book-entry transfer of
such Depositary Shares into the Exchange Agent's account at
a Book-Entry Transfer Facility (as defined in the
Prospectus) pursuant to the procedures set forth in the
Exchange Offer) on such day; (ii) the number of Depositary
Shares of each series represented by Notices of Guaranteed
Delivery on such day; (iii) the number of Depositary Shares
of each series properly withdrawn on such day; (iv) the
cumulative number of Depositary Shares of each series in
categories (i) through (iii) above; and (v) the number of
Depositary Shares of such series tendered for cash only.

On the day following such oral communication, the Company
shall furnish or cause the Exchange Agent to furnish to the
Co-Dealer Managers a written report confirming the above
information which has been communicated orally. The Company
shall furnish or cause the Exchange Agent to furnish to the
Co-Dealer Managers such reasonable information on the
tendering holders of Depositary Shares as may be requested
from time to time.

(l) To give the Co-Dealer Managers notice of any
change of the expiration time of the Exchange Offer (the
"Expiration Time").

5. Representations and Warranties of the Company and the
-----------------------------------------------------
Trust. Each of the Company and the Trust jointly and severally
-----
represents and warrants to and agrees with each of the Co-Dealer
Managers that:

(a) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 of the
Securities Act, will comply when so filed, in all material
respects, as to form with the Securities Act and the
Exchange Act; the Registration Statement at the time it
becomes effective and the Prospectus and any other Offering
Materials, on the Commencement Date and on the date on which
the Company commences delivery of the Preferred Securities
or payment in cash only for exchange of the Depositary
Shares of each series pursuant to the Exchange Offer (such
date, the "Exchange Date"), will comply, in all material
respects, as to form with the Securities Act and the
Exchange Act; the Registration Statement when it becomes
effective will not contain, and the Registration Statement,
as amended, if applicable, when such amendment becomes
effective will not contain, any 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; and as of the Commencement Date and
the Exchange Date, none of the Prospectus or the other
Offering Materials will contain any 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,
except that the representations and warranties set forth in
this Section 5(a) do not apply (A) to statements or
omissions made based upon and in conformity with information
supplied in writing by a Co-Dealer Manager expressly for use
in the Registration Statement, Prospectus, or any other
Offering Materials or (B) to that part of the Registration
Statement that constitutes the Statements of Eligibility and
Qualification on Form T-1 (the "Forms T-1") under the Trust
Indenture Act of The Bank of New York as trustee (the
"Indenture Trustee") under the Indenture (as defined
herein), as property trustee under the Trust Agreement (as
defined herein) and as trustee under the Guarantee.

(b) The Company has the corporate power and authority
to execute, deliver and perform its obligations under this
Agreement, the Trust Agreement, the Indenture and the
Guarantee; and this Agreement has been duly authorized,
executed and delivered by the Company. The Trust has the
business trust power and authority to execute, deliver and
perform its obligations under this Agreement; and this
Agreement has been duly authorized, executed and delivered
by the Trust.

(c) The Preferred Securities to be issued pursuant to
the Exchange Offer will be duly authorized by the Trust's
Amended and Restated Trust Agreement (the "Trust Agreement")
and, when issued in exchange for Debentures pursuant to the
Exchange Offer, will be validly issued and (subject to the
terms of the Trust Agreement) fully paid and nonassessable
undivided beneficial interests in the assets of the Trust,
not subject to any preemptive or similar rights, and will
conform in all material respects to all statements relating
thereto contained in the Prospectus. Holders of Preferred
Securities will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit.

(d) The Trust Agreement and the Guarantee have been
duly authorized by the Company and, as of the Exchange Date,
will have been duly executed and delivered by the Company.
Assuming due authorization, execution and delivery of the
Trust Agreement by the Trustees, the Trust Agreement will,
as of the Exchange Date, be a valid and binding obligation
of the Company and the Trustees, enforceable against the
Company and the Trustees in accordance with its terms,
subject to applicable bankruptcy, insolvency and other laws
affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
As of the Exchange Date, the Guarantee will be a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies
of creditors generally and of general principles of equity.

(e) The Indenture between the Company and the
Indenture Trustee (including the related supplemental
indenture governing the Debentures, the "Indenture"), will
be duly qualified under the Trust Indenture Act and,
assuming due authorization, execution and delivery of the
Indenture by the Indenture Trustee and upon execution and
delivery by the Company, will be enforceable against the
Company in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies
of creditors generally and of general principles of equity.

(f) The Debentures to be exchanged for Preferred
Securities and held in the Trust as trust assets in
connection with the Exchange Offer have been duly and
validly authorized, and assuming due authorization,
execution and delivery of the Indenture by the Indenture
Trustee, when executed and authenticated in accordance with
the provisions of the Indenture and delivered to the Trust
pursuant to the terms of the Exchange Offer, will be
entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company enforceable against
the Company in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights
and remedies of creditors generally and of general
principles of equity.

(g) The Company is a public utility corporation duly
authorized by its articles of incorporation, as amended, to
conduct the business which it is now conducting, is subject,
as to rates and services, to the jurisdiction of certain
authorities, as set forth in the Prospectus, and holds valid
and subsisting franchises, licenses and permits authorizing
it to carry on the utility business in which it is engaged.

(h) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Act, is and will be treated as a "grantor trust"
for Federal income tax purposes under existing law, has the
business trust power and authority to conduct its business
as presently conducted and as described in the Prospectus,
has been duly authorized to do business in the State of
Texas as a foreign limited liability company and is not
required to be authorized to do business in any other
jurisdiction.

(i) The execution and delivery by the Company and the
Trust of, and the performance by the Company and the Trust
of their obligations under, this Agreement, the execution
and delivery by the Company of, and the performance by the
Company of its obligations under, the Trust Agreement, the
Indenture and the Guarantee, the issuance and delivery by
the Trust of the Preferred Securities and the consummation
of the Exchange Offer and the fulfillment of the terms
herein contemplated will not contravene any provision of
applicable law or the articles of incorporation or by-laws
of the Company or the declaration of trust of the Trust or
any agreement or other instrument binding upon the Trust or
the Company or any of its subsidiaries or any judgment,
order or decree of any governmental body, agency or court
having jurisdiction over the Trust or the Company or any of
its subsidiaries, except for such contraventions that would
not, individually or in the aggregate, have a material
adverse effect on the financial condition or results of
operations of the Company and its subsidiaries, taken as a
whole, or the Trust and no consent, approval or
authorization or order of, or qualification with, any
governmental body or agency is required for the performance
by the Company and the Trust of their obligations under this
Agreement, the issuance and delivery of the Preferred
Securities and the consummation of the Exchange Offer,
except such as will be obtained under the Securities Act,
the Exchange Act or the Trust Indenture Act and as may be
required by the securities or Blue Sky laws of the various
states or the securities laws of non-U.S. jurisdictions in
connection with the Exchange Offer.

(j) Neither the Company nor the Trust is, or after
giving effect to the consummation of the Exchange Offer,
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, as amended.

6. Indemnification.
---------------

(a) Each of the Company and the Trust agrees to hold
harmless and indemnify you and your affiliates and any
officer, director, employee or agent of you or any such
affiliates and any person controlling (within the meaning of
Section 20(a) of the Exchange Act or Section 15 of the
Securities Act you or any of such affiliates (each, a
"Co-Dealer Manager Indemnitee") from and against any and
all losses, claims, damages or liabilities, joint or several,
and expenses whatsoever to which they may become subject
under any statute or common law and shall reimburse you
and each Co-Dealer Manager Indemnitee for any and all
legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred in
connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any
action, insofar as such losses, claims, damages,
liabilities, expenses or actions (A) arise out of or are
based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Offering
Materials or any other solicitation material used by the
Company or the Trust or the omission or alleged omission to
state in any such document a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading (other than statements or omissions
made in reliance upon and in conformity with information
furnished by you in writing to the Company or the Trust
expressly for use therein), (ii) any withdrawal or
termination by the Company or the Trust of, or failure by
the Company or the Trust to make or consummate, the Exchange
Offer, (iii) any actions taken or omitted to be taken by you
or any other Co-Dealer Manager Indemnitee with the consent
of the Company and the Trust or in conformity with actions
taken or omitted to be taken by the Company or the Trust or
(iv) any breach by the Company or the Trust of any
representation or warranty, or any failure by the Company or
the Trust to comply with any agreement or covenant,
contained in this Agreement or (B) arise out of, relate to
or are in connection with or are alleged to arise out of,
relate to or be in connection with the Exchange Offer, any
of the other transactions contemplated by the Offering
Materials or the performance of your services as Co-Dealer
Manager with respect to the Exchange Offer. However,
neither the Company nor the Trust will be obligated to
indemnify you or any other Co-Dealer Manager Indemnitee for
any loss, claim, damage, liability or expense pursuant to
clause (B) of the preceding sentence which has been
determined in a final judgment by a court of competent
jurisdiction to have resulted directly from willful
misconduct or negligence on the part of you or any other Co-
Dealer Manager Indemnitee.

(b) You agree to indemnify, defend and hold harmless
the Company and the Trust, their officers and directors, and
each person who controls the Company or the Trust (within
the meaning of Section 20(a) of the Exchange Act or 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 any
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 Offering
Materials, 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 by you in writing to
the Company or the Trust expressly for use therein. Your
agreement to so indemnify contained in this subparagraph (b)
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 or the
Trust, their directors or their officers, or by you or any
other Co-Dealer Manager Indemnitee, and shall survive the
termination of the Exchange Offer.

(c) The Company and the Trust and each Co-Dealer
Manager Indemnitee shall, upon the receipt of notice of the
commencement of any action 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 of any such action shall not relieve such
indemnifying party from any liability which it may have to
the indemnified party under this paragraph 6 except to the
extent that it has been prejudiced in any material respect
by such failure and in any event shall not relieve the
Company or the Trust from any other obligation or liability
which they may have to such Co-Dealer Manager Indemnitee
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
the defense of such action, in which event such defense
shall be conducted by counsel chosen by such indemnifying
party 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 an
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).

(d) If the indemnification provided for in sub-
paragraph (a) or (b) above shall be unenforceable under
applicable law, the 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 unavailable, in such proportion as
shall be appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party
on the other in connection with the actions, statements or
omissions which have resulted in such losses, claims,
damages, liabilities and expenses, as well as any other
relevant equitable considerations; provided, however, that
no indemnified party guilty of fraudulent misrepresentation
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. Each of the Company and the
Trust and you agree that it would not be just and equitable
if contributions pursuant to this subparagraph (d) were to
be determined by any method of allocation which does not
take account of the equitable considerations referred to
above.

7. Conditions to Co-Dealer Managers' Obligations. The
---------------------------------------------
obligations of the Co-Dealer Managers hereunder are subject as of
the Commencement Date and as of the Exchange Date to the accuracy
of the representations and warranties of the Company and the
Trust contained herein or in certificates of any officer of the
Company or any trustee of the Trust delivered pursuant to the
provisions hereof, to the performance, in all material respects,
by the Company and the Trust of their obligations hereunder to be
performed, and the following additional conditions:

(a) On the Commencement Date and the Exchange Date,
the Registration Statement shall have become effective under
the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending
before or, to the Company's or the Trust's knowledge,
threatened by the Commission.

(b) On the Commencement Date and the Exchange Date,
there shall not have been since the respective date as of
which information is given in the Registration Statement,
any material adverse change in the business, property or
financial condition of the Company.

(c) The Co-Dealer Managers shall have received on the
Exchange Date and the Commencement Date a certificate, dated
such date and signed by an executive officer of the Company,
to the effect set forth in clause (b) above and to the
effect that the representations and warranties of the
Company contained in this Agreement are true and correct in
all material respects as of such date and that the Company
has complied in all material respects with all of the
agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied on or
before such date. The officer signing and delivering such
certificate may rely upon the best of such officer's
knowledge as to proceedings threatened.

(d) On the Commencement Date and the Exchange Date,
there shall not have been since the respective date as of
which information is given in the Registration Statement,
any material adverse change, in the financial condition of
the Trust.

(e) The Co-Dealer Managers shall have received on the
Commencement Date and the Exchange Date a certificate, dated
such date and signed by a trustee of the Trust, to the
effect set forth in clause (d) above and to the effect that
the representations and warranties of the Trust contained in
this Agreement are true and correct in all material respects
as of such date and that the Trust has complied in all
material respects with all of the agreements and satisfied
in all material respects all of the conditions on its part
to be performed or satisfied on or before such date. The
person signing and delivering such certificate may rely upon
the best of such person's knowledge as to proceedings
threatened.

(f) On the Commencement Date and the Exchange Date,
the Co-Dealer Managers shall have received a signed opinion
of Worsham, Forsythe & Wooldridge, L.L.P., general counsel
for the Company, dated as of such date, to the effect that
(it being understood that certain of the opinions and
assumptions therein set forth below will be appropriate only
in one or the other of such opinions):

(i) The Company is a public utility
corporation duly authorized by its articles
of incorporation, as amended, to conduct the
business which it is now conducting, is
subject, as to rates and services, to the
jurisdiction of certain authorities, as set
forth in the Prospectus, and holds valid and
subsisting franchises, licenses and permits
authorizing it to carry on the utility
business in which it is engaged.

(ii) this Agreement, the Trust
Agreement, the Indenture, the Debentures and
the Guarantee have been duly authorized,
executed and delivered by the Company;

(iii) the Indenture has been duly
qualified under the Trust Indenture Act and,
assuming due authorization, execution and
delivery of the Indenture by the Company, the
Indenture will be enforceable against the
Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and
other laws affecting the rights and remedies
of creditors generally and of general
principles of equity;

(iv) assuming due authorization,
execution and delivery of the Debentures by
the Company and due authorization, execution
and delivery of the Indenture by the Company
and the Indenture Trustee, the Debentures
when executed and authenticated in accordance
with the provisions of the Indenture and
delivered pursuant to the terms of the
Exchange Offer will be entitled to the
benefits of the Indenture and will be valid
and binding obligations of the Company
enforceable against the Company in accordance
with their terms, subject to the effect of
bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws
affecting the rights and remedies of
creditors generally and of general principles
of equity;

(v) assuming due authorization,
execution and delivery of the Guarantee by
the Company, the Guarantee will be
enforceable against the Company in accordance
with its terms, subject to the effect of
bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws
affecting the rights and remedies of
creditors generally and of general principles
of equity;

(vi) the statements made in the
Prospectus under the captions "Description of
the Preferred Securities," "Description of
the Junior Subordinated Debentures," and
"Description of the Guarantee", insofar as
such statements constitute summaries of the
legal matters or documents referred to
therein, are accurate in all material
respects;

(vii) other than as stated in the
Registration Statement and the Prospectus,
there are no material pending legal
proceedings to which the Company is a party
or of which property of the Company is the
subject which depart from the ordinary
routine litigation incident to the kind of
business conducted by the Company, and to our
best knowledge no such proceedings are con-
templated;

(viii) neither the Company nor the
Trust is, or after giving effect to the
consummation the Exchange Offer, 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, as amended;

(ix) 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 Guarantee
under this Agreement; and

(x) such counsel (1) has no reason to
believe that (except for financial statements
and schedules and financial and statistical
data as to which such counsel need not
express any belief and except for that part
of the Registration Statement that
constitutes the Forms T-1) (i) the
Registration Statement, as of its 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) that the Prospectus or the
Prospectus as it may have been amended or
supplemented prior to the date of such
counsel's opinion (except as aforesaid),
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; the Registration Statement has
become and is effective under the Securities
Act, and (2) is of the opinion that the
Registration Statement and Prospectus as they
may have been amended and supplemented prior
to the date of such counsel's opinion (except
as aforesaid), as of their respective
effective or issue dates, comply as to form
in all material respects with the Securities
Act.

In rendering such opinion, such counsel may rely as to
(i) certain matters of fact on certificates of officers of
the Company and of public officials and (ii) all matters of
New York law on the opinion of Reid & Priest LLP delivered
pursuant to Section 7(h) hereof and may state that such
counsel expresses no opinion as to the laws of any
jurisdiction other than the State of Texas and the federal
law of the United States.

With respect to paragraph (x) above, such counsel may
state that it has not independently verified the accuracy,
completeness or fairness of the statements made or included
or incorporated by reference therein and takes no
responsibility therefor and that such opinion is based upon
such counsel's examination of the Registration Statement,
the Prospectus as amended or supplemented and any documents
incorporated by reference thereto, its investigations made
in connection with the preparation of the Registration
Statement and Prospectus and its participation in
conferences with certain officers and employees of the
Company and with representatives of Deloitte & Touche LLP
and any others referred to in such opinion.

(g) On the Commencement Date and the Exchange Date,
the Co-Dealer Managers shall have received a signed opinion
of Richards, Layton & Finger, Delaware counsel for the
Company, dated as of such date, to the effect that:

(i) the Trust has been duly organized
and is validly existing in good standing as a
business trust under the Delaware Act and has
the business trust power and authority to
conduct its business as described in the
Prospectus;

(ii) assuming due authorization,
execution and delivery of the Trust Agreement
by the Company and the Trustees, the Trust
Agreement is a legal, valid and binding
agreement of the Company and the Trustees,
enforceable against the Company and the
Trustees in accordance with its terms,
subject to the effect of bankruptcy,
insolvency, reorganization, receivership,
fraudulent conveyance, moratorium and other
laws affecting the rights and remedies of
creditors generally as from time to time in
effect, general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at
law), and considerations of public policy or
the effect of applicable law relating to
fiduciary duties;

(iii) under the Trust Agreement and the
Delaware Act, the execution and delivery of
this Agreement by the Trust, and the
performance by the Trust of its obligations
hereunder, have been duly authorized by all
requisite business trust action on the part
of the Trust;

(iv) the Preferred Securities have been
duly authorized by the Trust Agreement and
are duly and validly issued and, subject to
the terms of the Trust Agreement, fully paid
and nonassessable beneficial interests in the
Trust. The holders of Preferred Securities
will be, subject to the terms of the Trust
Agreement, 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; and

(v) under the Trust Agreement and the
Delaware Act, the issuance of the Preferred
Securities is not subject to preemptive
rights.

(h) On the Commencement Date and the Exchange Date,
the Co-Dealer Managers shall have received a signed opinion
of Reid & Priest LLP, of counsel for the Company, dated as
of such date, as to the matters described in Sections
7(f)(ii) through (vi), (viii), (ix) and (x) herein and to
the effect that such counsel confirms its opinion under the
caption "Certain United States Federal Income Tax
Consequences" in the Prospectus.

In rendering such opinion, such counsel may rely as to
certain matters of fact on certificates of officers of the
Company and of public officials and may state that such
counsel expresses no opinion as to the laws of any
jurisdiction other than the State of New York and the
federal law of the United States.

(i) The Co-Dealer Managers shall have received the
favorable opinion of Counsel for the Co-Dealer Managers,
dated as of the Commencement Date and the Exchange Date,
covering the incorporation and legal existence of the
Company, the issuance and delivery of the Preferred
Securities, this Agreement, the Registration Statement, the
Prospectus and such other related matters as the Co-Dealer
Managers may require. In giving such opinion such counsel
may rely, as to all matters governed by the laws of
the State of Texas, upon the opinion of Worsham, Forsythe
& Wooldridge, L.L.P. Such counsel may also state that,
insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates
of officers of the Company and certificates of public
officials.

(j) On the Commencement Date, the Co-Dealer Managers
shall have received from the Company's independent public
accountants, in form and substance satisfactory to the
Co-Dealer Managers and dated as of such date, containing
statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial
information contained in or incorporated by reference into
the Prospectus.

(k) At the Exchange Date, the Co-Dealer Managers shall
have received from the Company's independent public
accountants, in form and substance satisfactory to the
Co-Dealer Managers and dated as of such dates, to the effect
that such accountants reaffirm the statements made in the
letter furnished pursuant to Section 7(j).

(l) By the Exchange Date, the Company shall have
entered into appropriate agreements with the Information
Agent and the Exchange Agent for purposes of the Exchange
Offer.

8. Termination. (a) This Agreement shall terminate upon
-----------
the earliest to occur of (i) the last Exchange Date with respect
both series of Depositary Shares, (ii) the date on which the
Co-Dealer Managers give notice to the Company and the Trust that
any of the conditions specified in Section 7 have not been
fulfilled as of any date such conditions are required to be
fulfilled pursuant to Section 7 or (iii) the date on which the
Company terminates or withdraws the Exchange Offer for any reason
(the earliest to occur of clauses (i), (ii) or (iii) being
referred to as the "Termination Date").

(b) Notwithstanding termination of this Agreement pursuant
to subsection (a) of this Section 8, the obligations of the
Company to compensate the Co-Dealer Managers pursuant to Section
3, the representations and warranties contained in Section 5 and
the provisions of Section 6 shall survive any termination of this
Agreement.

9. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been
duly given if delivered, mailed or transmitted by any standard
form of telecommunication. Notices to the Co-Dealer Managers
shall be directed to Merrill Lynch & Co., World Financial Center,
South Tower, New York, New York 10281-1307, attention John
Thorndike, with a copy to Stephen K. Waite, Esq., Winthrop,
Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New
York 10004, and notices to the Company and the Trust shall be
directed to either of them c/o Texas Utilities Electric Company,
1601 Bryan Street, Dallas, Texas 75201, attention Cathryn C.
Hulen. Any notice under Section 6 hereof may be made by telex or
telephone, but if so made, shall be subsequently confirmed
promptly in writing.

10. Tombstone. The Company and the Trust acknowledge that
---------
the Co-Dealer Managers may, with the prior review and approval of
the Company, which approval shall not be unreasonably withheld,
place an announcement in such newspapers and periodicals as the
Co-Dealer Managers may choose, stating that the Co-Dealer
Managers are or were acting as co-dealer managers and financial
advisors to the Company and the Trust in connection with the
Exchange Offer. The costs relating to any such tombstone shall
be borne by the Co-Dealer Managers.

11. Survival of Certain Provisions. The representations,
------------------------------
warranties, indemnities and agreements of the Company and the
Trust will remain operative and in full force and effect
regardless of any investigation made by or on behalf of any
Co-Dealer Manager or any affiliate or controlling person thereof
and, subject to Section 8(b), will survive the consummation of
the Exchange Offer.

12. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the laws of the State of New
York, without giving effect to principles of conflicts of laws.

13. Counterparts. This Agreement may be executed in one or
------------
more counterparts, and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same
Agreement.

14. Successors. This Agreement is made solely for the
----------
benefit of the Co-Dealer Managers, the Company and the Trust and,
to the extent expressed, the parties indemnified pursuant to
Section 6, and no other persons shall acquire or have any right
under or by virtue of this Agreement. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other
than the parties hereto or their respective successors and
assigns, and, to the extent expressly set forth herein, the
parties indemnified pursuant to Section 6 hereof, any rights or
remedies under or by reason of this Agreement. Without limiting
the generality of the foregoing, the parties acknowledge that
nothing in this Agreement, expressed or implied, is intended to
confer on holders of the securities of the Trust or the Company
or creditors of the Company or the respective successors and
assigns of such creditors, any rights or remedies under or by
reason of this Agreement.

<PAGE>

If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof,
whereupon this instrument will become a binding agreement among
the Company, the Trust and the Co-Dealer Managers in accordance
with its terms.

Very truly yours,

TEXAS UTILITIES ELECTRIC COMPANY

By:
---------------------------

TU ELECTRIC CAPITAL I

By:
---------------------------
not in his/her individual
capacity but solely as
Administrative Trustee

Confirmed and accepted as of
the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED

GOLDMAN, SACHS & CO.

LEHMAN BROTHERS INC.

SMITH BARNEY INC.

By: Merrill Lynch, Pierce, Fenner
& Smith Incorporated

By:
------------------------------

Exhibit 4(a)

=================================================================

AMENDED AND RESTATED

TRUST AGREEMENT

between

TEXAS UTILITIES ELECTRIC COMPANY, as Depositor

and

THE BANK OF NEW YORK,

THE BANK OF NEW YORK (DELAWARE),

Wayne Patterson,

Cathryn C. Hulen

and

Michael Perkins, as Trustees

Dated as of _________ __, 1995

TU ELECTRIC CAPITAL I

=================================================================

<PAGE>

TU Electric Capital I

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 Securities . . 11
Section 2.05. Subscription and Purchase of Debentures;
Issuance of the Common Securities . . . 11
Section 2.06. Declaration of Trust; Appointment of
Additional Administrative Trustees . . 11
Section 2.07. Authorization to Enter into Certain
Transactions . . . . . . . . . . . . . 12
Section 2.08. Assets of Trust . . . . . . . . . . . . . 16
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 Securities . . . 19
Section 4.04. Payment Procedures . . . . . . . . . . . 20
Section 4.05. Tax Returns and Reports . . . . . . . . . 20

ARTICLE V.

Trust Securities Certificates

Section 5.01. Initial Ownership . . . . . . . . . . . . 20
Section 5.02. The Trust Securities Certificates . . . . 21
Section 5.03. Execution and Delivery of Trust
Securities Certificates . . . . . . . . 21
Section 5.04. Registration of Transfer and Exchange of
Preferred Securities Certificates . . . 21
Section 5.05. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates . . . . . 22
Section 5.06. Persons Deemed Securityholders . . . . . 22
Section 5.07. Access to List of Securityholders' Names
and Addresses . . . . . . . . . . . . . 22
Section 5.08. Maintenance of Office or Agency . . . . . 23
Section 5.09. Appointment of Paying Agent . . . . . . . 23
Section 5.10. Ownership of Common Securities by
Depositor . . . . . . . . . . . . . . . 24
Section 5.11. Definitive Preferred Securities
Certificates . . . . . . . . . . . . . 24
Section 5.12. Book-Entry System . . . . . . . . . . . . 24
Section 5.13. Rights of Securityholders . . . . . . . . 25

ARTICLE VI.

Acts of Securityholders; Meetings; Voting

Section 6.01. Limitations on Voting Rights . . . . . . 25
Section 6.02. Notice of Meetings . . . . . . . . . . . 26
Section 6.03. Meetings of Holders of Preferred
Securities . . . . . . . . . . . . . . 27
Section 6.04. Voting Rights . . . . . . . . . . . . . . 27
Section 6.05. Proxies, etc. . . . . . . . . . . . . . . 27
Section 6.06. Securityholder Action by Written
Consent . . . . . . . . . . . . . . . . 27
Section 6.07. Record Date for Voting and Other
Purposes . . . . . . . . . . . . . . . 28
Section 6.08. Acts of Securityholders . . . . . . . . . 28
Section 6.09. Inspection of Records . . . . . . . . . . 29

ARTICLE VII.

Representations and Warranties of the Property
Trustee and the Delaware Trustee

Section 7.01. Property Trustee . . . . . . . . . . . . 29
Section 7.02. Delaware Trustee . . . . . . . . . . . . 30

ARTICLE VIII.

The Trustees

Section 8.01. Certain Duties and Responsibilities . . . 30
Section 8.02. Notice of Defaults . . . . . . . . . . . 32
Section 8.03. Certain Rights of Property Trustee . . . 32
Section 8.04. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . 35
Section 8.05. May Hold Securities . . . . . . . . . . . 35
Section 8.06. Compensation; Fees; Indemnity . . . . . . 35
Section 8.07. Certain Trustees Required; Eligibility . 36
Section 8.08. Conflicting Interests . . . . . . . . . . 36
Section 8.09. Co-Trustees and Separate Trustee . . . . 37
Section 8.10. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . 38
Section 8.11. Acceptance of Appointment by Successor . 39
Section 8.12. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . 40
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 . . . . . 41
Section 8.16. Evidence of Compliance With Conditions
Precedent . . . . . . . . . . . . . . . 42
Section 8.17. Number of Trustees. . . . . . . . . . . . 42
Section 8.18. Delegation of Power. . . . . . . . . . . 42
Section 8.19. Fiduciary Duty . . . . . . . . . . . . . 43

ARTICLE IX.

Termination and Liquidation

Section 9.01. Termination Upon Expiration Date . . . . 44
Section 9.02. Early Termination . . . . . . . . . . . . 44
Section 9.03. Termination . . . . . . . . . . . . . . . 44
Section 9.04. Liquidation . . . . . . . . . . . . . . . 44

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 . . . . . . . . . . . . . . . 48
Section 10.04. Separability . . . . . . . . . . . . . . 49
Section 10.05. Governing Law . . . . . . . . . . . . . 49
Section 10.06. Successors . . . . . . . . . . . . . . . 49
Section 10.07. Headings . . . . . . . . . . . . . . . . 49
Section 10.08. Notice and Demand . . . . . . . . . . . 49
Section 10.09. Agreement Not to Petition . . . . . . . 50
Section 10.10. Conflict with Trust Indenture Act . . . 50

<PAGE>

AMENDED AND RESTATED TRUST AGREEMENT, dated as of
_______, 1995, between (i) Texas Utilities Electric 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) Wayne Patterson,
an individual, Cathryn C. Hulen, an individual and Michael
Perkins, an individual, each of whose address is c/o Texas
Utilities Services Inc., 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 referred to 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 Wayne Patterson, as the 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 September 28,
1995 (the "Original Trust Agreement"), and by the execution by
the Property Trustee, the Delaware Trustee and Wayne Patterson,
as Administrative Trustee and filing with the Secretary of State
of the State of Delaware of the Certificate of Trust, dated
September 28, 1995, a copy of which is attached as Exhibit A; and

WHEREAS, the Depositor, the Property Trustee, Delaware
Trustee and Wayne Patterson, as Administrative Trustee, 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 Securities by the Trust to the Depositor, (iii) the
issuance of the Preferred Securities by the Trust and (iv) the
appointment of the additional Administrative Trustees;

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:

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 and/or a given period,
the amount of Additional Interest (as defined in the Subordinated
Indenture) paid by the Depositor 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 formed hereunder and not in their
individual capacities, or such trustee's successor in interest in
such capacity, or any successor trustee appointed as herein
provided.

"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, 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).

"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository Trust Company
will be the initial Clearing Agency.

"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 Security" means an undivided beneficial
interest in the assets of the Trust having a Liquidation Amount
of $25 and having the rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.

"Common Securities Certificate" means a certificate
evidencing ownership of Common 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.

"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.

"Dealer Manager Agreement" means the Dealer Manager
Agreement, dated as of ____________, 1995, among the Trust, the
Depositor and the dealer managers named therein.

"Debenture Event of Default" means an "Event of
Default" as defined in the Subordinated Indenture.

"Debenture Issuer" means Texas Utilities Electric
Company, a Texas corporation, in its capacity as issuer of the
Debentures.

"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.

"Debentures" means the $____________ aggregate
principal amount of the Depositor's ____% Junior Subordinated
Debentures, Series A, Due __________, 2030, issued pursuant to
the Subordinated Indenture.

"Definitive Preferred Securities Certificates" means
Preferred 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 formed hereunder 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 Texas Utilities Electric
Company in its capacity as Holder of the Common Securities.

"Depositary Shares" means the Texas Utilities Electric
Company Depositary Shares, Series A, each representing 1/4 share
of $7.50 Cumulative Preferred Stock and Depositary Shares, Series
B, each representing 1/4 share of $7.22 Cumulative Preferred
Stock.

"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
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

(v) the occurrence of a Bankruptcy Event with
respect to the Trust.

"Exchange" has the meaning specified in Section
2.07(b).

"Exchange Act" has the meaning specified in Section
2.07(c).

"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 Securities, as amended from time
to time.

"Indemnified Person" means any Trustee, any Affiliate
of any Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of any
Trustee, or any employee or agent of the Trust or its Affiliates.

"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 Holder to whom such
Debentures are distributed.

"Liquidation Amount" means the stated amount of $25 per
Trust Security.

"Liquidation Date" means the date on which Debentures
are to be distributed to Holders of Trust Securities in
connection with a termination and liquidation of the Trust
pursuant to Section 9.04(a).

"Liquidation Distribution" has the meaning specified in
Section 9.04(e).

"No Recognition Opinion" has the meaning specified in
Section 9.04(d).

"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.

"Original Trust Agreement" has the meaning specified in
the recitals to this Trust Agreement.

"Outstanding," when used with respect to Preferred
Securities, means, as of the date of determination, all Preferred
Securities theretofore delivered under this Trust Agreement,
except:

(i) Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the
Administrative Trustees for cancellation;

(ii) Preferred 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
Securities; provided that, if such Preferred Securities
are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and

(iii) Preferred Securities in exchange for or in lieu
of which other Preferred 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
Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred
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 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 Securities are
owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. Preferred 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 Securities and that the pledgee is not the Depositor or
any Affiliate of the Depositor.

"Owner" means each Person who is the owner of a
Preferred Securities Certificate as reflected in the Securities
Register.

"Paying Agent" means any paying agent or co-paying
agent appointed pursuant to Section 5.09 and shall initially be
Texas Utilities Services, Inc.

"Payment Account" means a segregated non-interest-
bearing corporate trust account maintained by the Property
Trustee with the Bank in its trust department for the benefit of
the Securityholders in which all amounts paid in respect of the
Debentures will be held and from which the Property Trustee 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 Security" means a trust originated preferred
security representing an undivided beneficial interest in the
assets of the Trust having a Liquidation Amount of $25 and having
rights provided therefor in this Trust Agreement, including the
right to receive Distributions and a Liquidation Distribution as
provided herein.

"Preferred Securities Certificate" means a certificate
evidencing ownership of Preferred 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 formed and continued hereunder 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.

"Redemption Tax Opinion" has the meaning specified in
Section 9.04(b).

"Relevant Trustee" shall have the meaning specified in
Section 8.10.

"Securities Depository" shall have the meaning
specified in Section 5.12.

"Securities Register" and "Securities Registrar" shall
mean the Securities Register and Securities Registrar 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 deemed to be a
beneficial owner of such security within the meaning of the
Delaware Business Trust Act.

"Subordinated Indenture" means the Indenture, dated as
of __________, 1995, 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 of an
opinion of nationally recognized independent tax 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, for purposes
of this definition, 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 manner in which such amendment, clarification
or change is 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 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.

"Trust" means the Delaware business trust created by
the Original Trust Agreement 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 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 Security" means any one of the Common Securities
or the Preferred Securities.

"Trust Securities Certificate" means any one of the
Common Securities Certificates or the Preferred Securities
Certificates.

ARTICLE II.

Establishment of the Trust

Section 2.01. Name. The Trust created hereby shall be
known as "TU Electric Capital I", 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 Texas Utilities Electric 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 Securities.
On ______, 1995 the Depositor, on behalf of the Trust, executed
and delivered the Dealer Manager 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, shall execute and deliver Preferred Securities
Certificates in an aggregate amount of [ ] Preferred
Securities having an aggregate Liquidation Amount of $[ ].

Section 2.05. Subscription and Purchase of Debentures;
Issuance of the Common Securities. Contemporaneously with the
execution and delivery of this Trust Agreement, the
Administrative Trustees, on behalf of the Trust, shall deliver
and exchange for Debentures, registered in the name of the Trust
and having an aggregate principal amount equal to $[ ],
Common Securities Certificates, registered in the name of the
Depositor having an aggregate Liquidation Amount of $[ ]
and Preferred Securities Certificates registered, in the name of
the Depositor, having an aggregate Liquidation amount of $[ ].

Section 2.06. Declaration of Trust; Appointment of
Additional Administrative Trustees. (a) The exclusive purposes
and functions of the Trust are (i) to issue Trust Securities to
the Depositor in exchange for the Debentures, and (ii) to engage
in those activities necessary, convenient 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.

(b) The Property Trustee, the Delaware Trustee and
Wayne Patterson, as Administrative Trustee, hereby appoint
Cathryn C. Hulen and Michael Perkins as additional Administrative
Trustees, each of which persons by execution of this Trust
Agreement accepts such appointment.

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
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, the
Dealer Manager Agreement and such other agreements as
may be necessary or desirable in connection with the
consummation hereof (such execution to be by the
Administrative Trustees or any one of them);

(iii) to qualify the Trust to do business in any
jurisdiction as may be necessary or desirable;

(iv) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Payment Account;

(v) the filing of an Issuer Tender Offer Statement
on Schedule 13E-4 and any other tender offer statement
required to be filed with the Securities and Exchange
Commission and the conduct of the Exchange Offer as
described therein and in the Dealer Manager Agreement;

(vi) the registration of the Preferred 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;

(vii) the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be
determined by the Depositor and the registration of the
Preferred Securities under the Exchange Act, as
amended, and the preparation and filing of all periodic
and other reports and other documents pursuant to the
foregoing;

(viii) the appointment of a Paying Agent and Securities
Registrar in accordance with this Trust Agreement;

(ix) registering transfers of the Trust Securities in
accordance with this Trust Agreement;

(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 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;

(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) as 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 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 Trustee set forth in Section 2.07(a)(A) or the
Depositor set forth in Section 2.07(c).

(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
Securities, the Depositor shall have the right and responsibility
to assist the Trust with respect to, or effect on behalf of the
Trust, the following (and 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-4 in relation to the Preferred 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 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 prepare for filing by the Trust an
application to the New York Stock Exchange or any other
national stock exchange or the Nasdaq National Market
for listing upon notice of issuance of any Preferred
Securities;

(iv) to prepare for filing by the Trust with the
Commission and to execute a registration statement on
Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"),
including any amendments thereto;

(v) to select the investment banker or bankers to
act as dealer managers with respect to the exchange by
the Depositor of Preferred Securities for Depositary
Shares ("Exchange") and negotiate the terms of a Dealer
Manager Agreement and pricing agreement providing for
the Exchange;

(vi) to take any other actions necessary or desirable
to carry out any of the foregoing activities; and

(vii) to designate itself or an Affiliate to be the
Securities Registrar.

(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 of
1940, as amended, 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 Depositor 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 (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 Securities.

Section 2.08. Assets of Trust. The assets of the
Trust shall consist of the Trust Property.

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
Trustees 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.

(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 _________, 1995, 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 March 31, June 30, September 30 and December 31 of
each year, commencing on _________ __, 1995. 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) except that, if such Business Day is in the next
succeeding calendar year, payment of such distribution shall be
made on the immediately preceding Business Day, in each case,
with the 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 full quarterly period shall be computed on the
basis of twelve 30-day months and a 360-day year and for any
period shorter than a full month, on the basis of the actual
number of days elapsed. If the interest payment period for the
Debentures is extended pursuant to Section 311 of the
Subordinated Indenture, then Distributions on the Preferred
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 interest
payable on unpaid interest at the percentage rate per annum set
forth above, compounded monthly) 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 15 days prior to the
relevant Distribution Date.

Section 4.02. Redemption. (a) On each Debenture
Redemption Date, 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 date of such payment.

(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 Dividends to be paid on the
Redemption Date;

(iii) the CUSIP number;

(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 date
of such payment will become due and payable upon each
such Trust Security to be redeemed and that interest
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 date of such payment 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
date of such payment 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 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 date of
such payment and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price plus
accumulated and unpaid Distributions to the date of such payment
to the holders thereof upon surrender of their Preferred
Securities Certificates. Notwithstanding the foregoing,
Distributions payable 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 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 date of such payment,
but without interest thereon, and such 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 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). 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 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 relevant
record date, which shall be the fifteenth day prior to 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 3% to the Common Securities and 97% to the Preferred
Securities. The particular Preferred 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
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 a redemption of portions (equal
to $25 or integral multiples thereof) of the Liquidation Amount
of Preferred Securities of a denomination larger than $25. The
Property Trustee shall promptly notify the Security Registrar in
writing of the Preferred Securities selected for redemption and,
in the case of any Preferred 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 Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the
portion of the Liquidation Amount of Preferred Securities which
has been or is to be redeemed.

Section 4.03. Subordination of Common 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 a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution
(including Additional Amounts, if applicable) on, or Redemption
Price of, any Common Security, and no other payment on account of
the redemption, liquidation or other acquisition of Common
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 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 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 of plus accumulated and unpaid Distributions
of, Preferred Securities then due and payable.

(b) In the case of the occurrence of any Event of
Default resulting from a Debenture Event of Default, the Holder
of Common 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 Securities
have been cured, waived or otherwise eliminated. Until any such
Events of Default under this Trust Agreement with respect to the
Preferred Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of
the Holders of the Preferred Securities and not the Holder of the
Common Securities, and only the Holders of the Preferred
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 Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall
appear on the Register or, if the Preferred Securities are held
by a Clearing Agency, such Distributions shall be made to the
Clearing Agency, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable distribution
dates. Payments in respect of the Common Securities shall be
made in such manner as shall be mutually agreed between the
Administrative Trustees and the Holder of the Common 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.

ARTICLE V.

Trust Securities Certificates

Section 5.01. Initial Ownership. Upon the formation
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
$25 Liquidation Amount and integral multiples thereof. The Trust
Securities Certificates shall be executed on behalf of the Trust
by manual signature of at least one Administrative Trustee.
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, 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 5.11.

Section 5.03. Execution and Delivery of Trust
Securities Certificates. On the Closing Date, the Administrative
Trustees 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, 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.

Section 5.04. Registration of Transfer and Exchange of
Preferred Securities Certificates. The Securities 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 Securities Registrar shall provide for the
registration of Preferred Securities Certificates and the Common
Securities Certificates (subject to Section 5.10 in the case of
the Common Securities Certificates) and registration of transfers
and exchanges of Preferred Securities Certificates as herein
provided. Texas Utilities Services, Inc. shall be the initial
Securities Registrar.

Upon surrender for registration of transfer of any
Preferred Securities Certificate at the office or agency
maintained pursuant to Section 5.08, the Administrative Trustees,
or any one of them, shall execute and deliver (or shall cause The
Bank of New York as its agent to deliver), in the name of the
designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount. At the option of a Holder,
Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations of
the same class and of a like aggregate Liquidation Amount upon
surrender of the Preferred Securities Certificates to be
exchanged at the office or agency maintained pursuant to Section
5.08.

Every Preferred 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 Securities
Registrar duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Preferred 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 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
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 Securities so selected for
redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.

No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but
the Securities 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 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 Securities
Registrar, or if the Securities 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 Securities 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 signature
and the Administrative Trustees, or any one of them, 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 Securities 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 Securities
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 Trustee nor the
Securities 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 may
reasonably require, of the names and addresses of the
Securityholders as of the most recent Record 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 the Administrative 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
Administrative Trustees shall maintain in the Borough of
Manhattan, The City of New York, an office or offices or agency
or agencies where Preferred Securities Certificates may be
surrendered for registration of transfer or exchange and where
notices and demands to or upon the Trustees in respect of the
Trust Securities Certificates may be served. The Administrative
Trustees initially designate The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, New York 10286 at its principal
corporate trust office for such purposes. The Administrative
Trustees shall give prompt written notice to the Depositor and to
the Securityholders of any change in the location of the
Securities Register or any such office or agency.

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 determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under
this Agreement in any material respect. The Paying Agent shall
initially be Texas Utilities Services, Inc., 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 that Texas Utilities
Services, Inc. shall no longer be the 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 or trust company).
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. 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 Securities by
Depositor. On the Closing Date and on each other date provided
for in Section 2.05, the Depositor shall acquire, and thereafter
retain, beneficial and record ownership of the Common Securities.
Any attempted transfer of the Common Securities shall be void.
The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE". Common Securities
Certificates representing the Common Securities shall be issued
to the Depositor in the form of a typewritten or definitive
Common Securities Certificate.

Section 5.11. Definitive Preferred Securities
Certificates. Upon initial issuance of the Preferred Securities
the Definitive Preferred 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 by
manual signature the Definitive Preferred Securities Certificates
initially in accordance with the instructions of the Depositor.
Neither the Securities 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 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.
In such event, a single certificate will be issued and delivered
to the Securities Depository for such Preferred Securities, in
which case the beneficial owners of such Preferred Securities
will not receive physical delivery of certificates for Preferred
Securities. Except as provided herein, all transfers of
beneficial ownership interests in such Preferred Securities will
be made by book-entry only, and no investor or other party
purchasing, selling or otherwise transferring beneficial
ownership of the Preferred Securities will receive, hold or
deliver any certificate for Preferred Securities. The Depositor,
the Trustees and the Paying Agent will recognize the Securities
Depository or its nominee as the Holder of Preferred 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
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 Securities with respect to required notices and other
provisions of the letter of representations or agreement executed
with respect to such Preferred Securities.

Whenever the beneficial ownership of any Preferred
Securities is determined through the books of a Securities
Depository, the requirements in this Trust Agreement of holding,
delivering or transferring such Preferred Securities shall be
deemed modified with respect to such Preferred 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 Securities shall, while such Preferred 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 Securities shall have no preemptive
rights and when issued and delivered to Securityholders against
payment of the purchase price therefor will be fully paid and
nonassessable by the Trust.

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
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.

(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
Preferred 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 Securities. The Trustees shall not revoke
any action previously authorized or approved by a vote of the
Preferred Securities, except pursuant to a subsequent vote of the
Preferred Securities. The Property Trustee shall notify all
Holders of the Preferred 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 Securities, prior to taking any of
the foregoing actions, the Property Trustees 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 Trustee otherwise proposes to effect, (i)
any action that would materially adversely affect the powers,
preferences or special rights of the Preferred 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 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 Liquidation Amount
of the outstanding Preferred Securities. No amendment to this
Trust Agreement may be made if, as a result of such amendment,
the Trust would be classified as a "grantor trust" and not as an
association taxable as a corporation for United States federal
income tax purposes.

Section 6.02. Notice of Meetings. Notice of all
meetings of the Holders of Preferred 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 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 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
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
Securities (based upon their aggregate Liquidation Amount) and
may, at any time in their discretion, call a meeting of Holders
of Preferred Securities to vote on any matters as to the which
Holders of Preferred Securities are entitled to vote.

Holders of 50% of the then outstanding Preferred
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 Securities present, in person or
by proxy, holding more than the lesser of (x) 66 2/3% of the then
outstanding Preferred Securities (based upon their aggregate
Liquidation Amount) held by the Holders of then outstanding
Preferred Securities present, either in person or by proxy, at
such meeting and (y) 50% of the outstanding Preferred 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 $25 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 Trustee 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 if Securityholders holding
more than a majority of all outstanding Trust Securities entitled
to vote in respect of such action (or such 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 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, 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 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.

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 the Securityholders
and the Administrative Trustees or among such Securityholders or
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 organized, 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;

(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) neither the authorization, execution or delivery
by the Property Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Property Trustee
contemplated herein require the consent or approval of, the
giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency
under any existing Federal law governing the banking or trust
powers of the Property Trustee or under the laws of the State of
New York;

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 organized, 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) neither the authorization, execution or delivery
by the Delaware Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Delaware Trustee
contemplated herein require the consent or approval of, the
giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency
under any existing Federal law governing the banking or trust
powers of the Delaware Trustee or under the laws of the State of
Delaware.

ARTICLE VIII.

The Trustees

Section 8.01. Certain Duties and Responsibilities.

(a) The duties and responsibilities of the Trustees
shall be as provided by this Trust Agreement and, in the case of
the Property Trustee, the Trust Indenture Act, and no implied
covenants or obligations shall be read into this Trust Agreement
against any of the Trustees. Notwithstanding the 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 and limitations on
liability afforded to the Property Trustee under this Trust
Agreement, the Trust Indenture Act and, to the extent applicable,
Rule 3A-7 under the Investment Company Act of 1940, 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.

(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 and limitations on liability afforded to
the Property Trustee under this Trust Agreement, the
Trust Indenture Act and Rule 3a-7 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 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. Within five
Business Days after the occurrence of any Event of Default, the
Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.08, notice of any default known to the
Property Trustee 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.

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
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 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 of the Securityholders pursuant to
this Trust Agreement, unless such Securityholders 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 compliance
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
reasonably believed by it to be genuine, unless
requested in writing to do so by one or more
Securityholders, 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, provided that the Property Trustee
shall be responsible for its own negligence or
recklessness with respect to selection of any agent or
attorney appointed by it hereunder.

(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 (1) a
responsible officer of the Property Trustee shall have
actual knowledge of the default or Event of Default or
(2) 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; and

(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) (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 (i) may request instructions from
the Holders of the Trust Securities, which instructions
may only be given by the Holders of the same proportion
and liquidation amount of the Trust Securities as would
be entitled to direct the Property Trustee under the
terms of this Trust Agreement in respect of such
remedies, rights or actions, (ii) may refrain from
enforcing such remedy or right or taking such other
action until such instructions are received, and
(iii) 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 value or condition of the property of the Trust or any part
thereof, nor as to the validity or sufficiency of this Trust
Agreement or the Trust Securities. The Trustee shall not be
accountable for the use or application by the Trust of the
proceeds of the Trust Securities in accordance with Section 2.05.

Section 8.05. May Hold Securities. Except as provided
in the definition of the term "Outstanding" in Article I, any
Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee
of Trust Securities and may otherwise deal with the Trust with
the same rights it would have if it were not a Trustee or such
other agent.

Section 8.06. Compensation; Fees; Indemnity.

The Depositor agrees

(1) 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);

(2) 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

(3) 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 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.

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.

The provisions of this Section 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 Indenture.
The Subordinated Indenture and the Guarantee Agreement 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 an Event of Default under the
Subordinated Indenture 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
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 an Event of Default under the
Subordinated Indenture 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 the
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.

(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 with
respect to the Trust Securities 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 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 with respect to the
Trust Securities.

Unless an Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by
Act of the Common Securityholder. If an 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 Preferred Securities
Certificates, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust).

If the Relevant Trustee shall resign, be removed or
become incapable of continuing to act as Relevant Trustee at a
time when no Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common
Securityholder delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees with
respect to the Trust Securities and the Trust, 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 an Event of Default shall have occurred and be
continuing, the Preferred Securityholders, by Act of the
Preferred Securityholders of a majority in Liquidation Amount of
the Preferred Securities then outstanding delivered to the
retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees with respect to the Trust Securities
and the Trust, and the Relevant Trustee shall comply with the
applicable requirements of Section 8.11. If no successor
Relevant Trustee with respect to the Trust Securities shall have
been so appointed by the Common Securityholders or the Preferred
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 with respect to the Trust Securities.

The retiring Relevant Trustee shall give notice of each
resignation and each removal of the Relevant Trustee with respect
to the Trust Securities and the Trust and each appointment of a
successor Trustee with respect to the Trust Securities and the
Trust to all Securityholders in the manner provided in Section
10.08 and shall give notice to the Depositor. Each notice shall
include the name and address of the successor Relevant Trustee
with respect to the Trust Securities and the Trust and, in the
case of the Property Trustee, 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
requirement 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).

Section 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant
Trustee with respect to all Trust Securities and the Trust, every
such successor Relevant Trustee so appointed shall execute,
acknowledge and deliver to the Trust and to the retiring Relevant
Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Relevant Trustee shall
become effective and 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 the request of the Depositor or the successor
Relevant Trustee, such retiring Relevant Trustee shall, upon
payment of its charges by the Depositor, execute and deliver an
instrument transferring to such successor Relevant Trustee all
the rights, powers and trusts of the retiring Relevant Trustee
and shall duly assign, transfer and deliver to such successor
Relevant Trustee all property and money held by such retiring
Relevant Trustee hereunder, subject, nevertheless, to the
retiring Trustee's prior lien provided for in Section 8.06.

In case of the appointment hereunder of a successor
Relevant Trustee with respect to the Trust Securities and the
Trust, the retiring Relevant Trustee and each successor Trustee
with respect to the Trust Securities 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, powers, trusts and duties of the retiring Relevant
Trustee with respect to the Trust Securities and the Trust 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 with
respect to the Trust Securities and the Trust; 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 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 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) Within 60 days after December 31 of each year commencing
with December 31, 1995 the Property Trustee shall transmit by
mail to all Securityholders, as their names and addresses appear
in the Register, and to the Depositor, a brief report dated as of
such December 31 with respect to:

(i) its eligibility under Section 8.07 or, in lieu
thereof, if to the best of its knowledge it has
continued to be eligible under said Section, a written
statement to such effect;

(ii) a statement that the Property Trustee has
complied with all of its obligations under this Trust
Agreement during the twelve-month period (or, in the
case of the initial report, the period since the
Closing Date) ending with such December 31 or, if the
Property Trustee has not complied in any material
respect with such obligations, a description of such
non-compliance; and

(iii) any action taken by the Property Trustee in the
performance of its duties hereunder which it has not
previously reported and which in its opinion materially
affects the Trust Securities.

(b) In addition 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.

(c) 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.

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 as required by Section 314 (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.

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 five, 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 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.

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 Section
2.07(a), 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:

(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 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

(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 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. Termination Upon Expiration Date. The
Trust shall automatically terminate on December 31, 2035 (the
"Expiration Date") and the Trust Property shall be distributed in
accordance with 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,
dissolution or liquidation of, in respect of, the
Depositor;

(ii) the redemption of all of the Preferred
Securities;

(iii) the occurrence of a Tax Event;

(iv) an order for judicial termination of the Trust
having been entered by a court of competent
jurisdiction;

the Trust shall terminate and the Trustees shall take such action
as is required by Section 9.04.

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) If an Early
Termination Event specified in clause (i) or (iv) of Section 9.02
occurs, after satisfaction of liabilities to creditors of the
Trust 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 adequately
providing for the satisfaction of liability to Creditors, if any,
and 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 Security
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 Trustee or the Property Trustee
shall deem appropriate.

(b) Except where Section 9.02(a)(ii) or 9.04(d) or (e)
applies, in order to affect the liquidation of the Trust, if any,
and 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 affect
the distribution of Debentures in exchange for the Outstanding
Trust Securities Certificates.

(c) Except where Section 9.02(a)(ii) or 9.04(d) or (e)
applies, after the Liquidation Date, (i) the Trust Securities
will no longer be deemed to be Outstanding, (ii) certificates
representing a Like Amount of Debentures will be issued to
Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees 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 Certificates until such
certificates are so surrendered (and until such 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 Debentures upon surrender of Trust Securities
Certificates.

(d) If at any time, a Tax Event shall occur and be
continuing, the Administrative Trustees shall, unless the
Debentures are redeemed in the limited circumstances described
below, terminate the Trust and, after satisfaction of creditors
of the Trust, if any, as provided by applicable law cause
Debentures held by the Property Trustee having a Like Amount of
the Preferred Securities and the Common Securities to be
distributed to the Holders of the Preferred Securities and the
Common Securities on a pro rata basis in liquidation of such
Holders' interests in the Trust, within 90 days following the
occurrence of such Tax Event; provided, however, that as a
condition of such termination and distribution, the
Administrative Trustees shall have received an opinion of
nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on
any then applicable published revenue rulings of the Internal
Revenue Service, to the effect that the Holders of the Preferred
Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of the termination of the
Trust and distribution of Debentures; and, provided, further,
that, if and as long as at the time there is available to the
Trust the opportunity to eliminate, within such 90-day period,
the Tax Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar
reasonable measure which has no adverse effect on the Trust, the
Depositor or the Holders of the Preferred Securities, the Trust
will pursue such measure in lieu of termination. Furthermore, if
(i) the Administrative Trustees have received an opinion of
nationally recognized independent tax counsel experienced in such
matters (a "Redemption Tax Opinion") that, as a result of a Tax
Event, there is more than an insubstantial risk that the
Depositor would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes even if
the Debentures were distributed to the Holders of Preferred
Securities and Common Securities in liquidation of such Holders'
interests in the Trust as described above or (ii) the
Administrative Trustees shall have been informed by such tax
counsel that a No Recognition Opinion cannot be delivered to the
Trust, the Depositor shall have the right, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole
or in part for cash at the Redemption Price plus accumulated and
unpaid Distributions to the date of such payment within 90 days
following the occurrence of such Tax Event, and promptly
following such redemption Preferred Securities and Common
Securities with an aggregate liquidation preference amount equal
to the aggregate principal amount of the Debentures so redeemed
will be redeemed by the Trust at the Redemption Price plus
accumulated and unpaid Distributions on a pro rata basis,
provided, however, that if at the time there is available to the
Depositor or the Administrative Trustees on behalf of the Trust
the opportunity to eliminate, within such 90-day period, the Tax
Event by taking some ministerial action, such as filing a form or
making an election, or pursuing some other similar reasonable
measure, which has no adverse effect on the Trust, the Depositor
or the Holders of the Preferred Securities, the Depositor or the
Administrative Trustees on behalf of the Trust will pursue such
measure in lieu of redemption and provided further that the
Depositor shall have no right to redeem the Debentures while the
Administrative Trustees on behalf of the Trust are pursuing any
such ministerial action. The Common Securities will be redeemed
on a pro rata basis with the Preferred Securities, except that if
an Event of Default has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price and accumulated and
unpaid Distributions to the date of such payment.

(e) In the event that, notwithstanding the other
provisions of this Section 9.04, whether because of an order for
termination 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
dissolved, wound-up or terminated, by the Property Trustee in
such manner as the Property Trustee determines. In such event,
on the date of the dissolution, winding-up or other termination
of the Trust, 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 dissolution, winding up or termination, 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 Depositor will be entitled to receive
Liquidation Distributions upon any such dissolution, winding-up
or termination pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if an Event of Default has
occurred and is continuing or if an Event of Default has not
occurred solely by reason of a requirement that time lapse or
notice be given, the Preferred Securities shall have a priority
over the Common Securities.

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 or other similar interests in the Trust the
amounts due such Holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be.
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 or incapacity of any person having an
interest, beneficial or otherwise, in a Trust Security shall not
operate to terminate this Trust Agreement, 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, which shall not be
inconsistent with the other provisions of this Trust Agreement or
(ii) 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 of 1940, as amended; provided, however, that, except
in the case of clause (ii), such action shall not adversely
affect in any material respect the interests of any
Securityholder and, in the case of clause (i), any amendments of
this Trust Agreement shall become effective when notice thereof
is given to the Securityholders.

(b) Except as provided in Section 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 Trust Securities then
outstanding and (ii) receipt by the Trustees of an Opinion of
Counsel to the 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 of an
"investment company" under the Investment Company Act of 1940, as
amended.

(c) In addition to and notwithstanding any other
provision in this Trust Agreement, without the consent of each
affected Securityholder (such consent being obtained in
accordance with Section 6.03 or 6.06), this Trust Agreement may
not be amended to (i) 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 Trustee shall enter into or consent to any
amendment to this Trust Agreement which would cause the Trust to
fail or cease to qualify for the exemption from status of an
"investment company" under the Investment Company Act of 1940, as
amended, 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.

(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 is entitled to receive an
Opinion of Counsel as conclusive evidence that any amendment to
this Trust Agreement executed 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 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 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 Securityholder,
to such Preferred Securityholder as such Securityholder's name
and address may appear on the Securities Register and (ii) in the
case of the Common Securityholder or the Depositor, to Texas
Utilities Electric Company, Energy Plaza, 1601 Bryan Street,
Dallas, Texas 75201, Attention: Treasurer, facsimile no. 214-812-
[ ], with a copy to the Secretary, facsimile no. 214-812-[ ].
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, NY 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 TU
Electric Capital I". 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 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 stopped 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 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 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 OR ANY BENEFICIAL
OWNER, 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.

<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.

TEXAS UTILITIES ELECTRIC COMPANY

By:
-----------------------------
Title:

THE BANK OF NEW YORK,
as Property Trustee

By:
-----------------------------
Title:

THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee

By:
-----------------------------
Title:

-----------------------------
Wayne Patterson
solely in his capacity as
Administrative Trustee

-----------------------------
Cathryn Hulen
solely in her capacity as
Administrative Trustee

-----------------------------
Michael Perkins
solely in his capacity as
Administrative Trustee

<PAGE>

EXHIBIT A

CERTIFICATE OF TRUST

TU ELECTRIC CAPITAL I

THIS CERTIFICATE OF TRUST of TU Electric Capital I (the
"Trust"), dated as of September 28, 1995, 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 formed
hereby is TU Electric Capital I.

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.

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), WAYNE PATTERSON,
not in its individual capacity not in his individual
but solely as Trustee capacity but solely
as Trustee

By: By:
--------------- ----------------
Name:
Title:

THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee

By:
----------------
Name:
Title:

<PAGE>

EXHIBIT B

THIS CERTIFICATE IS NOT TRANSFERABLE

Certificate Number Number of Common Securities

C-[ ]

Certificate Evidencing Common Securities

TU Electric Capital I

Common Securities
(liquidation amount $25 per Common Security)

TU Electric Capital I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that Texas Utilities Electric 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
Securities (liquidation amount $25 per Common Security) (the
"Common Securities"). In accordance with Section 5.10 of the
Trust Agreement (as defined below) the Common 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 Securities are set
forth in, and this certificate and the Common 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 _______ ___, 1995, as
the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common
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.

<PAGE>

IN WITNESS WHEREOF, an Administrative Trustee of the
Trust has executed this certificate for and on behalf of the
Trust this ____ day of _________, 1995.

TU Electric Capital I

By:
-------------------------------
not in his (her) individual
capacity, but solely as
Administrative Trustee

<PAGE>

EXHIBIT C

Previously filed as Exhibit 4(d)

<PAGE>

EXHIBIT D

Previously filed as Exhibit 4(f)

Exhibit 4(b)
__________________________________________

TEXAS UTILITIES ELECTRIC COMPANY

THE BANK OF NEW YORK

Trustee

_________

Indenture
(For Unsecured Subordinated Debt Securities
relating to Trust Securities)

Dated as of ______________, 1995

__________________________________________

<PAGE>
TABLE OF CONTENTS

PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . 1

ARTICLE ONE . . . . . . . . . . . . . . . . . . . . . . . . . 1

Definitions and Other Provisions of General Application . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Interest . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . 3
Company Request or Company Order . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . 3
Dollar or $ . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . . 3
Government Obligations . . . . . . . . . . . . . . 3
Guarantee . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . 5
Place of Payment . . . . . . . . . . . . . . . . . 5
Predecessor Security . . . . . . . . . . . . . . . 5
Preferred Securities . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . 6

Note: This table of contents shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
Security Register and Security Registrar . . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . 6
Special Record Date . . . . . . . . . . . . . . . . 6
Stated Maturity . . . . . . . . . . . . . . . . . . 6
Trust . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Agreement . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . 7
United States . . . . . . . . . . . . . . . . . . . 7
SECTION 102. Compliance Certificates and Opinions . . . 7
SECTION 103. Form of Documents Delivered to Trustee . . 8
SECTION 104. Acts of Holders . . . . . . . . . . . . . 9
SECTION 105. Notices, etc. to Trustee and Company . . . 10
SECTION 106. Notice to Holders of Securities; Waiver . 11
SECTION 107. Conflict with Trust Indenture Act . . . . 12
SECTION 108. Effect of Headings and Table of Contents . 12
SECTION 109. Successors and Assigns . . . . . . . . . . 12
SECTION 110. Separability Clause . . . . . . . . . . . 12
SECTION 111. Benefits of Indenture . . . . . . . . . . 12
SECTION 112. Governing Law . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . 13

ARTICLE TWO . . . . . . . . . . . . . . . . . . . . . . . . . 13

Security Forms . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 201. Forms Generally . . . . . . . . . . . . . 13
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 14

ARTICLE THREE . . . . . . . . . . . . . . . . . . . . . . . . 14

The Securities . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 301. Amount Unlimited; Issuable in Series . . . 14
SECTION 302. Denominations . . . . . . . . . . . . . . 18
SECTION 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . 18
SECTION 304. Temporary Securities . . . . . . . . . . . 19
SECTION 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . 20
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . 21
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . 22
SECTION 308. Persons Deemed Owners . . . . . . . . . . 23
SECTION 309. Cancellation by Security Registrar . . . . 23
SECTION 310. Computation of Interest . . . . . . . . . 24
SECTION 311. Extension of Interest Payment . . . . . . 24
SECTION 312. Additional Interest. . . . . . . . . . . . 24

ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . 25

Redemption of Securities . . . . . . . . . . . . . . . . . . 25
SECTION 401. Applicability of Article . . . . . . . . . 25
SECTION 402. Election to Redeem; Notice to Trustee . . 25
SECTION 403. Selection of Securities to Be Redeemed . . 25
SECTION 404. Notice of Redemption . . . . . . . . . . . 26
SECTION 405. Securities Payable on Redemption Date . . 27
SECTION 406. Securities Redeemed in Part . . . . . . . 27

ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . 28

Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 501. Applicability of Article . . . . . . . . . 28
SECTION 502. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . 28
SECTION 503. Redemption of Securities for Sinking Fund 28

ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . 29

Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 601. Payment of Principal, Premium and Interest 29
SECTION 602. Maintenance of Office or Agency . . . . . 29
SECTION 603. Money for Securities Payments to Be Held in
Trust . . . . . . . . . . . . . . . . . . 30
SECTION 604. Corporate Existence . . . . . . . . . . . 31
SECTION 605. Maintenance of Properties . . . . . . . . 31
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . . . . 32
SECTION 607. Waiver of Certain Covenants . . . . . . . 32
SECTION 608. Restriction on Payment of Dividends . . . 32
SECTION 609. Maintenance of Trust Existence . . . . . . 33
SECTION 610. Rights of Holders of Preferred Securities 33

ARTICLE SEVEN . . . . . . . . . . . . . . . . . . . . . . . . 34

Satisfaction and Discharge . . . . . . . . . . . . . . . . . 34
SECTION 701. Satisfaction and Discharge of Securities . 34
SECTION 702. Satisfaction and Discharge of Indenture . 36
SECTION 703. Application of Trust Money . . . . . . . . 37

ARTICLE EIGHT . . . . . . . . . . . . . . . . . . . . . . . . 37

Events of Default; Remedies . . . . . . . . . . . . . . . . . 37
SECTION 801. Events of Default . . . . . . . . . . . . 37
SECTION 802. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . 39
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 40
SECTION 804. Trustee May File Proofs of Claim . . . . . 41
SECTION 805. Trustee May Enforce Claims Without Possession
of Securities . . . . . . . . . . . . . . 41
SECTION 806. Application of Money Collected . . . . . . 42
SECTION 807. Limitation on Suits . . . . . . . . . . . 42
SECTION 808. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . 43
SECTION 809. Restoration of Rights and Remedies . . . . 43
SECTION 810. Rights and Remedies Cumulative . . . . . . 43
SECTION 811. Delay or Omission Not Waiver . . . . . . . 43
SECTION 812. Control by Holders of Securities . . . . . 44
SECTION 813. Waiver of Past Defaults . . . . . . . . . 44
SECTION 814. Undertaking for Costs . . . . . . . . . . 45
SECTION 815. Waiver of Stay or Extension Laws . . . . . 45

ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . 45

The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 901. Certain Duties and Responsibilities . . . 45
SECTION 902. Notice of Defaults . . . . . . . . . . . . 46
SECTION 903. Certain Rights of Trustee . . . . . . . . 46
SECTION 904. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . 47
SECTION 905. May Hold Securities . . . . . . . . . . . 48
SECTION 906. Money Held in Trust . . . . . . . . . . . 48
SECTION 907. Compensation and Reimbursement . . . . . . 48
SECTION 908. Disqualification; Conflicting Interests. . 49
SECTION 909. Corporate Trustee Required; Eligibility . 49
SECTION 910. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . 50
SECTION 911. Acceptance of Appointment by Successor . . 52
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 53
SECTION 913. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . 53
SECTION 914. Co-trustees and Separate Trustees. . . . . 54
SECTION 915. Appointment of Authenticating Agent . . . 55

ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . 57

Holders' Lists and Reports by Trustee and Company . . . . . . 57
SECTION 1001. Lists of Holders . . . . . . . . . . . . 57
SECTION 1002. Reports by Trustee and Company . . . . . 57

ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . 57

Consolidation, Merger, Conveyance or Other Transfer . . . . 57
SECTION 1101. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . 57
SECTION 1102. Successor Corporation Substituted . . . . 58

ARTICLE TWELVE . . . . . . . . . . . . . . . . . . . . . . . 58

Supplemental Indentures . . . . . . . . . . . . . . . . . . . 58
SECTION 1201. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . . 58
SECTION 1202. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . 60
SECTION 1203. Execution of Supplemental Indentures . . 62
SECTION 1204. Effect of Supplemental Indentures . . . . 62
SECTION 1205. Conformity With Trust Indenture Act . . . 62
SECTION 1206. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . 62
SECTION 1207. Modification Without Supplemental
Indenture . . . . . . . . . . . . . . . . 62

ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . 63

Meetings of Holders; Action Without Meeting . . . . . . . . . 63
SECTION 1301. Purposes for Which Meetings May Be Called 63
SECTION 1302. Call, Notice and Place of Meetings . . . 63
SECTION 1303. Persons Entitled to Vote at Meetings . . 64
SECTION 1304. Quorum; Action . . . . . . . . . . . . . 64
SECTION 1305. Attendance at Meetings; Determination of
Voting Rights; Conduct and Adjournment of
Meetings . . . . . . . . . . . . . . . . 65
SECTION 1306. Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . . 66
SECTION 1307. Action Without Meeting . . . . . . . . . 66

ARTICLE FOURTEEN . . . . . . . . . . . . . . . . . . . . . . 66

Immunity of Incorporators, Stockholders, Officers and Directors
66
SECTION 1401. Liability Solely Corporate . . . . . . . 66

ARTICLE FIFTEEN . . . . . . . . . . . . . . . . . . . . . . . 67

Subordination of Securities . . . . . . . . . . . . . . . . . 67
SECTION 1501. Securities Subordinate to Senior
Indebtedness. . . . . . . . . . . . . . . 67
SECTION 1502. Payment Over of Proceeds of Securities . 67
SECTION 1503. Disputes with Holders of Certain Senior
Indebtedness . . . . . . . . . . . . . . 69
SECTION 1504. Subrogation . . . . . . . . . . . . . . . 70
SECTION 1505. Obligation of the Company Unconditional . 70
SECTION 1506. Priority of Senior Indebtedness Upon
Maturity . . . . . . . . . . . . . . . . 71
SECTION 1507. Trustee as Holder of Senior Indebtedness 71
SECTION 1508. Notice to Trustee to Effectuate
Subordination . . . . . . . . . . . . . . 71
SECTION 1509. Modification, Extension, etc. of Senior
Indebtedness . . . . . . . . . . . . . . 71
SECTION 1510. Trustee Has No Fiduciary Duty to Holders of
Senior Indebtedness . . . . . . . . . . . 72
SECTION 1511. Paying Agents Other Than the Trustee . . 72
SECTION 1512. Rights of Holders of Senior Indebtedness Not
Impaired . . . . . . . . . . . . . . . . 72
SECTION 1513. Effect of Subordination Provisions;
Termination . . . . . . . . . . . . . . . 72

Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . 74

Signatures and Seals . . . . . . . . . . . . . . . . . . . . 74

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . 75

<PAGE>
TEXAS UTILITIES ELECTRIC COMPANY

Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of ______________________, 1995

Trust Indenture Act Section Indenture Section

ss.310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 909
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 909
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 914
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 908
910
ss.311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
ss.312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
ss.313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
ss.314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . 606
(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ss.315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
903
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 814
ss.316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 812
813
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 802
812
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 813
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 808
ss.317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 803
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 804
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 603
ss.318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 107

<PAGE>

INDENTURE, dated as of _________________, between TEXAS
UTILITIES ELECTRIC COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (herein called the
"Company"), having its principal office at Energy Plaza, 1601
Bryan Street, Dallas, Texas 75201, and THE BANK OF NEW YORK, a
corporation of the State of New York, having its principal
corporate trust office at 101 Barclay Street, New York, New York
10286, as Trustee (herein called the "Trustee").

RECITAL OF THE COMPANY

The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of its unsecured subordinated debentures, notes or other
evidences of indebtedness (herein called the "Securities"), in an
unlimited aggregate principal amount to be issued in one or more
series as contemplated herein; and all acts necessary to make
this Indenture a valid agreement of the Company have been
performed.
<PAGE>
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires,
capitalized terms used herein shall have the meanings assigned to
them in Article One of this Indenture.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as
follows:

ARTICLE ONE

Definitions and Other Provisions of General Application

SECTION 101. Definitions.

For all purposes of this Indenture, 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 terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;

(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with
generally accepted accounting principles in the United States,
and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United
States at the date of such computation or, at the election of
the Company from time to time, at the date of the execution
and delivery of this Indenture; provided, however, that in
determining generally accepted accounting principles
applicable to the Company, the Company shall, to the extent
required, conform to any order, rule or regulation of any
administrative agency, regulatory authority or other govern-
mental body having jurisdiction over the Company; and

(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.

Certain terms, used principally in Article Nine, are de-
fined in that Article.

"Act", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.

"Additional Interest" has the meaning specified in
Section 312.

"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 through
one or more intermediaries, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.

"Authenticating Agent" means any Person (other than the
Company or an Affiliate of the Company) authorized by the Trustee
pursuant to Section 915 to act on behalf of the Trustee to
authenticate one or more series of Securities.

"Authorized Officer" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters
relating to this Indenture.

"Board of Directors" means either the board of directors
of the Company or any committee thereof duly authorized to act in
respect of matters relating to this Indenture.

"Board Resolution" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered
to the Trustee.

"Business Day", when used with respect to a Place of
Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation
or executive order to remain closed, except as may be otherwise
specified as contemplated by Section 301.

"Commission" means the Securities and Exchange Commis-
sion, as from time to time constituted, created under the
Securities Exchange Act of 1934, as amended, or, if at any time
after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any, per-
forming such duties at such time.

"Company" means the Person named as the "Company" in the
first paragraph of this Indenture until a successor Person shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
Person.

"Company Request" or "Company Order" means a written re-
quest or order signed in the name of the Company by an Authorized
Officer and delivered to the Trustee.

"Corporate Trust Office" means the office of the Trustee
at which at any particular time its corporate trust business
shall be principally administered, which office at the date of
execution and delivery of this Indenture is located at 101
Barclay Street, New York, New York 10286.

"corporation" means a corporation, association, company,
joint stock company or business trust.

"Defaulted Interest" has the meaning specified in Section
307.

"Dollar" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private
debts.

"Event of Default" has the meaning specified in Section
801.

"Governmental Authority" means the government of the
United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any of the foregoing, or any department,
agency, authority or other instrumentality of any of the
foregoing.

"Government Obligations" means:

(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States and entitled to the benefit of the full
faith and credit thereof; and

(b) certificates, depositary receipts or other
instruments which evidence a direct ownership interest in
obligations described in clause (a) above or in any specific
interest or principal payments due in respect thereof;
provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or
trust company (which may include the Trustee or any Paying
Agent) subject to Federal or state supervision or examination
with a combined capital and surplus of at least $50,000,000;
and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to
the holders of such certificates, depositary receipts or other
instruments the full amount received by such custodian in
respect of such obligations or specific payments and shall not
be permitted to make any deduction therefrom.

"Guarantee" means the guarantee agreement delivered from the
Company to a Trust, for the benefit of the holders of Preferred
Securities issued by such Trust.

"Holder" means a Person in whose name a Security is registered
in the Security Register.

"Indenture" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall
include the terms of a particular series of Securities
established as contemplated by Section 301.

"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest
on such Security.

"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an installment of
principal becomes due and payable as provided in such Security or
in this Indenture, whether at the Stated Maturity, by declaration
of acceleration, upon call for redemption or otherwise.

"Officer's Certificate" means a certificate signed by an
Authorized Officer and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, or other counsel acceptable to
the Trustee.

"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:

(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;

(b) Securities deemed to have been paid in accordance
with Section 701; and

(c) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are
held by a bona fide purchaser or purchasers in whose hands
such Securities are valid obligations of the Company;

provided, however, that in determining whether or not the Holders
of the requisite principal amount of the Securities Outstanding
under this Indenture, or the Outstanding Securities of any
series, have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or whether or not a quorum is
present at a meeting of Holders of Securities, Securities owned
by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor (unless the
Company, such Affiliate or such obligor owns all Securities
Outstanding under this Indenture, or all Outstanding Securities
of each such series, as the case may be, determined without
regard to this provision) shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any
such determination as to the presence of a quorum, only Secu-
rities which the Trustee knows to be so owned shall be so
disregarded; provided, however, that Securities so owned which
have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other
obligor; and provided, further, that, in the case of any Security
the principal of which is payable from time to time without
presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount
thereof less the aggregate amount of principal thereof
theretofore paid.

"Paying Agent" means any Person, including the Company,
authorized by the Company to pay the principal of, and premium,
if any, or interest, if any, on any Securities on behalf of the
Company.

"Person" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any Governmental
Authority.

"Place of Payment", when used with respect to the Securities
of any series, means the place or places, specified as contem-
plated by Section 301, at which, subject to Section 602, prin-
cipal of and premium, if any, and interest, if any, on the
Securities of such series are payable.

"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered
under Section 306 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.

"Preferred Securities" means any preferred trust interests
issued by a Trust or similar securities issued by permitted
successors to such Trust in accordance with the Trust Agreement
pertaining to such Trust.

"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.

"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.

"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date
specified for that purpose as contemplated by Section 301.

"Responsible Officer", when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any securities authen-
ticated and delivered under this Indenture.

"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.

"Senior Indebtedness" means all obligations (other than non-
recourse obligations and the indebtedness issued under this
Indenture) of, or guaranteed or assumed by, the Company for
borrowed money, including both senior and subordinated
indebtedness for borrowed money (other than the Securities), or
for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Company and
its subsidiaries in accordance with generally accepted accounting
principles as in effect from time to time, or evidenced by bonds,
debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of
any such indebtedness or obligations, whether existing as of the
date of this Indenture or subsequently incurred by the Company
unless, in the case of any particular indebtedness, renewal,
extension or refunding, the instrument creating or evidencing the
same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding
is not superior in right of payment to or is pari passu with the
Securities; provided that the Company's obligations under the
Guaranty shall not be deemed to be Senior Indebtedness.

"Special Record Date" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by
the Trustee pursuant to Section 307.

"Stated Maturity", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means
the date on which the principal of such obligation or such
installment of principal or interest is stated to be due and
payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).

"Trust" means TU Electric Capital I, TU Electric Capital II,
or TU Electric Capital III, each a statutory business trust
formed under the laws of the State of Delaware, or any other
Trust designated pursuant to Section 301 hereof or any permitted
successor under the Trust Agreement pertaining to such Trust.

"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of ______________, 1995, relating to TU
Electric Capital I, the Amended and Restated Trust Agreement,
dated as of ______________, 1995, relating to TU Electric Capital
II, the Amended and Restated Trust Agreement, dated as of
______________, 1995, relating to TU Electric Capital III or an
Amended and Restated Trust Agreement relating to a Trust
designated pursuant to Section 301 hereof, in each case, among
the Company, as Depositor, and the trustees named therein as they
may be amended from time to time.

"Trust Indenture Act" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in effect at
such time.

"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have
become such with respect to one or more series of Securities
pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities
of that series.

"United States" means the United States of America, its
Territories, its possessions and other areas subject to its
political jurisdiction.

SECTION 102. Compliance Certificates and Opinions.

Except as otherwise expressly provided in this Indenture,
upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the
Company shall, if requested by the Trustee, furnish to the
Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action (including any covenants compliance with which
constitutes a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to
which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need
be furnished.

Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:

(a) a statement that each Person signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;

(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of each such
Person, such Person has made such examination or investigation
as is necessary to enable such Person 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 Person, such condition or covenant has been complied
with.

SECTION 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.

Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which such Officer's Certificate or
opinion are based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.

Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.

Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officer's Certificate, Opinion of Counsel or
other document or instrument, a clerical, typographical or other
inadvertent or unintentional error or omission shall be
discovered therein, a new document or instrument may be
substituted therefor in corrected form with the same force and
effect as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution and/or
delivery thereof, such substitute document or instrument shall be
deemed to have been executed and/or delivered as of the date or
dates required with respect to the document or instrument for
which it is substituted. Anything in this Indenture to the
contrary notwithstanding, if any such corrective document or
instrument indicates that action has been taken by or at the
request of the Company which could not have been taken had the
original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or
otherwise rendered ineffective but shall be and remain in full
force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the
generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to
the benefits of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.

SECTION 104. Acts of Holders.

(a) Any request, demand, authorization, direction,
notice, consent, election, waiver or other action provided by
this Indenture to be made, given or taken by Holders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing or, alternatively,
may be embodied in and evidenced by the record of Holders
voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders duly called
and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such
instrument or instruments and so voting at any such meeting.
Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of
a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 901) conclusive in favor of
the Trustee and the Company, if made in the manner provided in
this Section. The record of any meeting of Holders shall be
proved in the manner provided in Section 1306.

(b) 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
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which
the Trustee and the Company deem sufficient. 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.

(c) The principal amount and serial numbers of
Securities held by any Person, and the date of holding the
same, shall be proved by the Security Register.

(d) Any request, demand, authorization, direction,
notice, consent, election, waiver or other Act of a Holder
shall bind every future Holder of the same Security and the
Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.

(e) Until such time as written instruments shall have
been delivered to the Trustee with respect to the requisite
percentage of principal amount of Securities for the action
contemplated by such instruments, any such instrument executed
and delivered by or on behalf of a Holder may be revoked with
respect to any or all of such Securities by written notice by
such Holder or any subsequent Holder, proven in the manner in
which such instrument was proven.

(f) Securities of any series authenticated and delivered
after any Act of Holders may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to
any action taken by such Act of Holders. If the Company shall
so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to
such action may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.

(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, fix in
advance a record date for the determination of Holders
entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be
Holders for the purposes of determining whether Holders of the
requisite proportion of the Outstanding Securities have
authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be
computed as of the record date.

SECTION 105. Notices, etc. to Trustee and Company.

Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an
officer or other responsible employee of the addressee, or
transmitted by facsimile transmission, telex or other direct
written electronic means to such telephone number or other
electronic communications address as the parties hereto shall
from time to time designate, or transmitted by certified or
registered mail, charges prepaid, to the applicable address set
opposite such party's name below or to such other address as
either party hereto may from time to time designate:

If to the Trustee, to:

The Bank of New York
101 Barclay Street
New York, New York 10286

Attention: Vice President, Corporate Trust Administration
Telephone: (212) 815-5375
Telecopy: (212) 815-5915

If to the Company, to:

Texas Utilities Electric Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201

Attention:
Telephone:
Telecopy:

Any communication contemplated herein shall be deemed to
have been made, given, furnished and filed if personally
delivered, on the date of delivery, if transmitted by facsimile
transmission, telex or other direct written electronic means, on
the date of transmission, and if transmitted by registered mail,
on the date of receipt.

SECTION 106. Notice to Holders of Securities; Waiver.

Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given, and shall be deemed given, to
Holders if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder
as it appears in the Security Register, not later than the latest
date, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice.

In case by reason of the suspension of regular mail serv-
ice or by reason of any other cause it shall be impracticable to
give such notice to Holders by mail, then such notification as
shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders.

Any notice required by this Indenture may be waived in
writing by the Person entitled to receive such notice, either
before or after the event otherwise to be specified therein, and
such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.

SECTION 107. Conflict with Trust Indenture Act.

If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof which is required or
deemed to be included in this Indenture by, or is otherwise
governed by, any of the provisions of the Trust Indenture Act,
such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.

SECTION 108. Effect of Headings and Table of Contents.

The Article and Section headings in this Indenture and
the Table of Contents are for convenience only and shall not
affect the construction hereof.

SECTION 109. Successors and Assigns.

All covenants and agreements in this Indenture by the
Company and Trustee shall bind their respective successors and
assigns, whether so expressed or not.

SECTION 110. Separability Clause.

In case any provision in this Indenture or the Securities
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 111. Benefits of Indenture.

Nothing in this Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto,
their successors hereunder, the Holders and, so long as the
notice described in Section 1513 hereof has not been given, the
holders of Senior Indebtedness, any benefit or any legal or
equitable right, remedy or claim under this Indenture; provided,
however, that for so long as any Preferred Securities remain
outstanding, the holders of such Preferred Securities, subject to
certain limitations set forth in this Indenture, may enforce the
Company's obligations hereunder directly against the Company as
third party beneficiaries of this Indenture without first
proceeding against the Trust issuing such Preferred Securities.

SECTION 112. Governing Law.

This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New
York, except to the extent that the law of any other jurisdiction
shall be mandatorily applicable.

SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities other than a
provision in Securities of any series, or in the Board Resolution
or Officer's Certificate which establishes the terms of the
Securities of such series, which specifically states that such
provision shall apply in lieu of this Section) payment of
interest or principal and premium, if any, need not be made at
such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment, except that if
such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect, and in the same
amount, as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, as the case may be, and, if such
payment is made or duly provided for on such Business Day, no
interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, to such Business Day.

ARTICLE TWO

Security Forms

SECTION 201. Forms Generally.

The definitive Securities of each series shall be in
substantially the form or forms thereof established in the
indenture supplemental hereto establishing such series or in a
Board Resolution establishing such series, or in an Officer's
Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form or
forms of Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a Board
Resolution, such Board Resolution and Officer's Certificate, if
any, shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.

Unless otherwise specified as contemplated by Section
301, the Securities of each series shall be issuable in
registered form without coupons. The definitive Securities shall
be produced in such manner as shall be determined by the officers
executing such Securities, as evidenced by their execution
thereof.

SECTION 202. Form of Trustee's Certificate of Authentication.

The Trustee's certificate of authentication shall be in
substantially the form set forth below:

This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.

_________________________________
as Trustee

By: _____________________________
Authorized Signatory

ARTICLE THREE

The Securities

SECTION 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited;
provided, however, that all Securities shall be issued to a Trust
in exchange for securities of the Company or to evidence loans by
a Trust of the proceeds of the issuance of Preferred Securities
of such Trust plus the amount deposited by the Company with such
Trust from time to time.

The Securities may be issued in one or more series.
Prior to the authentication and delivery of Securities of any
series there shall be established by specification in a
supplemental indenture or in a Board Resolution, or in an
Officer's Certificate pursuant to a supplemental indenture or a
Board Resolution:

(a) the title of the Securities of such series (which
shall distinguish the Securities of such series from
Securities of all other series);

(b) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 406 or 1206 and
except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered
hereunder);

(c) the Person or Persons (without specific
identification) to whom interest on Securities of such series
shall be payable on any Interest Payment Date, if other than
the Persons in whose names such Securities (or one or more
Predecessor Securities) are registered at the close of
business on the Regular Record Date for such interest;

(d) the date or dates on which the principal of the
Securities of such series is payable or any formulary or other
method or other means by which such date or dates shall be
determined, by reference or otherwise (without regard to any
provisions for redemption, prepayment, acceleration, purchase
or extension);

(e) the rate or rates at which the Securities of such
series shall bear interest, if any (including the rate or
rates at which overdue principal shall bear interest, if
different from the rate or rates at which such Securities
shall bear interest prior to Maturity, and, if applicable, the
rate or rates at which overdue premium or interest shall bear
interest, if any), or any formulary or other method or other
means by which such rate or rates shall be determined, by
reference or otherwise; the date or dates from which such
interest shall accrue; the Interest Payment Dates on which
such interest shall be payable and the Regular Record Date, if
any, for the interest payable on such Securities on any
Interest Payment Date; the right of the Company, if any, to
extend the interest payment periods and the duration of any
such extension as contemplated by Section 311; and the basis
of computation of interest, if other than as provided in
Section 310;

(f) the place or places at which or methods by which (1)
the principal of and premium, if any, and interest, if any, on
Securities of such series shall be payable, (2) registration
of transfer of Securities of such series may be effected, (3)
exchanges of Securities of such series may be effected and (4)
notices and demands to or upon the Company in respect of the
Securities of such series and this Indenture may be served;
the Security Registrar for such series; and if such is the
case, that the principal of such Securities shall be payable
without presentment or surrender thereof;

(g) the period or periods within which, or the date or
dates on which, the price or prices at which and the terms and
conditions upon which the Securities of such series may be
redeemed, in whole or in part, at the option of the Company
and any restrictions on such redemptions, including but not
limited to a restriction on a partial redemption by the
Company of the Securities of any series, resulting in
delisting of such Securities from any national exchange;

(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series
pursuant to any sinking fund or other mandatory redemption
provisions or at the option of a Holder thereof and the period
or periods within which or the date or dates on which, the
price or prices at which and the terms and conditions upon
which such Securities shall be redeemed or purchased, in whole
or in part, pursuant to such obligation, and applicable
exceptions to the requirements of Section 404 in the case of
mandatory redemption or redemption at the option of the
Holder;

(i) the denominations in which Securities of such series
shall be issuable if other than denominations of $25 and any
integral multiple thereof;

(j) the currency or currencies, including composite
currencies, in which payment of the principal of and premium,
if any, and interest, if any, on the Securities of such series
shall be payable (if other than in Dollars);

(k) if the principal of or premium, if any, or interest,
if any, on the Securities of such series are to be payable, at
the election of the Company or a Holder thereof, in a coin or
currency other than that in which the Securities are stated to
be payable, the period or periods within which and the terms
and conditions upon which, such election may be made;

(l) if the principal of or premium, if any, or interest,
if any, on the Securities of such series are to be payable, or
are to be payable at the election of the Company or a Holder
thereof, in securities or other property, the type and amount
of such securities or other property, or the formulary or
other method or other means by which such amount shall be
determined, and the period or periods within which, and the
terms and conditions upon which, any such election may be
made;

(m) if the amount payable in respect of principal of or
premium, if any, or interest, if any, on the Securities of
such series may be determined with reference to an index or
other fact or event ascertainable outside this Indenture, the
manner in which such amounts shall be determined to the extent
not established pursuant to clause (e) of this paragraph;

(n) if other than the principal amount thereof, the
portion of the principal amount of Securities of such series
which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 802;

(o) any Events of Default, in addition to those
specified in Section 801, with respect to the Securities of
such series, and any covenants of the Company for the benefit
of the Holders of the Securities of such series, in addition
to those set forth in Article Six;

(p) the terms, if any, pursuant to which the Securities
of such series may be converted into or exchanged for shares
of capital stock or other securities of the Company or any
other Person;

(q) the obligations or instruments, if any, which shall
be considered to be Government Obligations in respect of the
Securities of such series denominated in a currency other than
Dollars or in a composite currency, and any additional or
alternative provisions for the reinstatement of the Company's
indebtedness in respect of such Securities after the
satisfaction and discharge thereof as provided in Section 701;

(r) if the Securities of such series are to be issued in
global form, (i) any limitations on the rights of the Holder
or Holders of such Securities to transfer or exchange the same
or to obtain the registration of transfer thereof, (ii) any
limitations on the rights of the Holder or Holders thereof to
obtain certificates therefor in definitive form in lieu of
temporary form and (iii) any and all other matters incidental
to such Securities;

(s) if the Securities of such series are to be issuable
as bearer securities, any and all matters incidental thereto
which are not specifically addressed in a supplemental
indenture as contemplated by clause (g) of Section 1201;

(t) to the extent not established pursuant to clause (r)
of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series to transfer or
exchange such Securities or to obtain the registration of
transfer thereof; and if a service charge will be made for the
registration of transfer or exchange of Securities of such
series the amount or terms thereof;

(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of
such series;

(v) the designation of the Trust to which Securities of
such series are to be issued; and

(w) any other terms of the Securities of such series not
inconsistent with the provisions of this Indenture.

All Securities of any one series shall be substantially
identical, except as to principal amount and date of issue and
except as may be set forth in the terms of such series as
contemplated above. The Securities of each series shall be
subordinated in right of payment to Senior Indebtedness as
provided in Article Fifteen.

SECTION 302. Denominations.

Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, the Securities of each
series shall be issuable in denominations of $25 and any integral
multiple thereof.

SECTION 303. Execution, Authentication, Delivery and Dating.

Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, the Securities shall be
executed on behalf of the Company by an Authorized Officer and
may have the corporate seal of the Company affixed thereto or
reproduced thereon attested by any other Authorized Officer or by
the Secretary of the Company. The signature of any or all of
these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of
individuals who were at the time of execution Authorized Officers
or the Secretary of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such
Securities.

The Trustee shall authenticate and deliver Securities of
a series, for original issue, at one time or from time to time in
accordance with the Company Order referred to below, upon receipt
by the Trustee of:

(a) the instrument or instruments establishing the form
or forms and terms of such series, as provided in Sections 201
and 301;

(b) a Company Order requesting the authentication and
delivery of such Securities and, to the extent that the terms
of such Securities shall not have been established in an
indenture supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental indenture
or Board Resolution, all as contemplated by Sections 201 and
301, establishing such terms;

(d) an Opinion of Counsel to the effect that:

(i) the form or forms of such Securities have been
duly authorized by the Company and have been established
in conformity with the provisions of this Indenture;

(ii) the terms of such Securities have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture; and

(iii) such Securities, when authenticated and
delivered by the Trustee and issued and delivered by the
Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to
the benefits provided by this Indenture, and enforceable
in accordance with their terms, subject, as to
enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or
at law).

If the form or terms of the Securities of any series have
been established by or pursuant to a Board Resolution or an
Officer's Certificate as permitted by Sections 201 or 301, the
Trustee shall not be required to authenticate such Securities if
the issuance of such Securities pursuant to this Indenture will
materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the
Trustee.

Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, each Security shall be
dated the date of its authentication.

Unless otherwise specified as contemplated by Section 301
with respect to any series of Securities, no Security shall be
entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating
Agent by manual signature, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and
delivered hereunder to the Company, or any Person acting on its
behalf, but shall never have been issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes
of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be
entitled to the benefits hereof.

SECTION 304. Temporary Securities.

Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they
are issued, with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such
Securities; provided, however, that temporary Securities need not
recite specific redemption, sinking fund, conversion or exchange
provisions.

Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, after the
preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable,
without charge to the Holder thereof, for definitive Securities
of such series upon surrender of such temporary Securities at the
office or agency of the Company maintained pursuant to Section
602 in a Place of Payment for such Securities. Upon such
surrender of temporary Securities for such exchange, the Company
shall, except as aforesaid, execute and the Trustee shall
authenticate and deliver in exchange therefor definitive Securi-
ties of the same series, of authorized denominations and of like
tenor and aggregate principal amount.

Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive
Securities of the same series and of like tenor authenticated and
delivered hereunder.

SECTION 305. Registration, Registration of Transfer and
Exchange.

The Company shall cause to be kept in each office
designated pursuant to Section 602, with respect to the
Securities of each series, a register (all registers kept in
accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series and the
registration of transfer thereof. The Company shall designate
one Person to maintain the Security Register for the Securities
of each series on a consolidated basis, and such Person is
referred to herein, with respect to such series, as the "Security
Registrar." Anything herein to the contrary notwithstanding, the
Company may designate one or more of its offices as an office in
which a register with respect to the Securities of one or more
series shall be maintained, and the Company may designate itself
the Security Registrar with respect to one or more of such
series. The Security Register shall be open for inspection by
the Trustee and the Company at all reasonable times.

Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, upon surrender
for registration of transfer of any Security of such series at
the office or agency of the Company maintained pursuant to
Section 602 in a Place of Payment for such series, the Company
shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more
new Securities of the same series, of authorized denominations
and of like tenor and aggregate principal amount.

Except as otherwise specified as contemplated by Section
301 with respect to the Securities of any series, any Security of
such series may be exchanged at the option of the Holder, for one
or more new Securities of the same series, of authorized
denominations and of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at any such
office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.

All Securities delivered upon any registration of
transfer or exchange of Securities shall be valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.

Every Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company,
the Trustee or the Security Registrar) be duly endorsed or shall
be accompanied by a written instrument of transfer in form sat-
isfactory to the Company, the Trustee or the Security Registrar,
as the case may be, duly executed by the Holder thereof or his
attorney duly authorized in writing.

Unless otherwise specified as contemplated by Section 301
with respect to Securities of any series, no service charge shall
be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section
304, 406 or 1206 not involving any transfer.

The Company shall not be required to execute or to
provide for the registration of transfer of or the exchange of
(a) Securities of any series during a period of 15 days
immediately preceding the date notice is to be given identifying
the serial numbers of the Securities of such series called for
redemption or (b) any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security
being redeemed in part.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series,
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

If there shall be delivered to the Company and the Trus-
tee (a) evidence to their satisfaction of the ownership of and
the destruction, loss or theft of any Security and (b) such
security or indemnity as may be reasonably required by them to
save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such
Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series, and of like
tenor and principal amount and bearing a number not
contemporaneously outstanding.

Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee) connected therewith.

Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security
shall be at any time enforceable by anyone other than the Holder
of such new Security, and any such new Security shall be entitled
to all the benefits of this Indenture equally and proportionately
with any and all other Securities of such series duly issued
hereunder.

The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, interest on any
Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest.

Subject to Section 311, any interest on any Security of
any series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the
Holder on the related Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (a)
or (b) below:

(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a date
(herein called a "Special Record Date") for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment,
and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense
of the Company, shall promptly cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at the address of such
Holder as it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such
Special Record Date.

(b) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section and
Section 305, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.

SECTION 308. Persons Deemed Owners.

Prior to due presentment of a Security for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Security is registered as the absolute owner of such Security for
the purpose of receiving payment of principal of and premium, if
any, and (subject to Sections 305 and 307) interest, if any, on
such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

SECTION 309. Cancellation by Security Registrar.

All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Security Registrar, be delivered to the
Security Registrar and, if not theretofore canceled, shall be
promptly canceled by the Security Registrar. The Company may at
any time deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever or which
the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar.
No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled
Securities held by the Security Registrar shall be disposed of in
accordance with a Company Order delivered to the Security
Registrar and the Trustee, and the Security Registrar shall
promptly deliver a certificate of disposition to the Trustee and
the Company unless, by a Company Order, similarly delivered, the
Company shall direct that canceled Securities be returned to it.
The Security Registrar shall promptly deliver evidence of any
cancellation of a Security in accordance with this Section 309 to
the Trustee and the Company.

SECTION 310. Computation of Interest.

Except as otherwise specified as contemplated by Section
301 for Securities of any series, interest on the Securities of
each series shall be computed on the basis of a 360-day year
consisting 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.

SECTION 311. Extension of Interest Payment.

The Company shall have the right at any time, so long as
the Company is not in default in the payment of interest on the
Securities of any series hereunder, to extend interest payment
periods on all Securities of one or more series, if so specified
as contemplated by Section 301 with respect to such Securities
and upon such terms as may be specified as contemplated by
Section 301 with respect to such Securities.

SECTION 312. Additional Interest.

So long as any Preferred Securities remain outstanding,
if the Trust which issued such Preferred Securities shall be
required to pay, with respect to its income derived from the
interest payments on the Securities of any series, any amounts
for or on account of any taxes, duties, assessments or
governmental charges of whatever nature imposed by the United
States, or any other taxing authority, then, in any such case,
the Company will pay as interest on such series such additional
interest ("Additional Interest") as may be necessary in order
that the net amounts received and retained by such Trust after
the payment of such taxes, duties, assessments or governmental
charges shall result in such Trust's having such funds as it
would have had in the absence of the payment of such taxes,
duties, assessments or governmental charges.

ARTICLE FOUR

Redemption of Securities

SECTION 401. Applicability of Article.

Securities of any series which are redeemable before
their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by
Section 301 for Securities of such series) in accordance with
this Article.

SECTION 402. Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution or an Officer's
Certificate. The Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of
such Securities to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere
in this Indenture or (b) pursuant to an election of the Company
which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Offi-
cer's Certificate evidencing compliance with such restriction or
condition.

SECTION 403. Selection of Securities to Be Redeemed.

If less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed shall be
selected by the Security Registrar from the Outstanding
Securities of such series not previously called for redemption,
by such method as shall be provided for any particular series,
or, in the absence of any such provision, by such method as the
Security Registrar shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to
the minimum authorized denomination for Securities of such series
or any integral multiple thereof) of the principal amount of
Securities of such series of a denomination larger than the
minimum authorized denomination for Securities of such series;
provided, however, that if, as indicated in an Officer's
Certificate, the Company shall have offered to purchase all or
any principal amount of the Securities then Outstanding of any
series, and less than all of such Securities as to which such
offer was made shall have been tendered to the Company for such
purchase, the Security Registrar, if so directed by Company
Order, shall select for redemption all or any principal amount of
such Securities which have not been so tendered.

The Security Registrar shall promptly notify the Company
and the Trustee in writing of the Securities selected for
redemption and, in the case of any Securities selected to be
redeemed in part, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal
amount of such Securities which has been or is to be redeemed.

SECTION 404. Notice of Redemption.

Notice of redemption shall be given in the manner pro-
vided in Section 106 to the Holders of the Securities to be
redeemed not less than 30 nor more than 60 days prior to the
Redemption Date.

All notices of redemption shall state:

(a) the Redemption Date,

(b) the Redemption Price,

(c) if less than all the Securities of any series are to
be redeemed, the identification of the particular Securities
to be redeemed and the portion of the principal amount of any
Security to be redeemed in part,

(d) that on the Redemption Date the Redemption Price,
together with accrued interest, if any, to the Redemption
Date, will become due and payable upon each such Security to
be redeemed and, if applicable, that interest thereon will
cease to accrue on and after said date,

(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any, unless it shall have been specified as
contemplated by Section 301 with respect to such Securities
that such surrender shall not be required,

(f) that the redemption is for a sinking or other fund,
if such is the case, and

(g) such other matters as the Company shall deem
desirable or appropriate.

Unless otherwise specified with respect to any Securities
in accordance with Section 301, with respect to any notice of
redemption of Securities at the election of the Company, unless,
upon the giving of such notice, such Securities shall be deemed
to have been paid in accordance with Section 701, such notice may
state that such redemption shall be conditional upon the receipt
by the Paying Agent or Agents for such Securities, on or prior to
the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on
such Securities and that if such money shall not have been so
received such notice shall be of no force or effect and the
Company shall not be required to redeem such Securities. In the
event that such notice of redemption contains such a condition
and such money is not so received, the redemption shall not be
made and within a reasonable time thereafter notice shall be
given, in the manner in which the notice of redemption was given,
that such money was not so received and such redemption was not
required to be made, and the Paying Agent or Agents for the
Securities otherwise to have been redeemed shall promptly return
to the Holders thereof any of such Securities which had been
surrendered for payment upon such redemption.

Notice of redemption of Securities to be redeemed at the
election of the Company, and any notice of non-satisfaction of a
condition for redemption as aforesaid, shall be given by the
Company or, at the Company's request, by the Security Registrar
in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security
Registrar in the name and at the expense of the Company.

SECTION 405. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, and
the conditions, if any, set forth in such notice having been sat-
isfied, the Securities or portions thereof so to be redeemed
shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date
(unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price
and accrued interest, if any) such Securities or portions
thereof, if interest-bearing, shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with
such notice, such Security or portion thereof shall be paid by
the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that
no such surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to such
Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such
Security, any installment of interest on any Security the Stated
Maturity of which installment is on or prior to the Redemption
Date shall be payable to the Holder of such Security, or one or
more Predecessor Securities, registered as such at the close of
business on the related Regular Record Date according to the
terms of such Security and subject to the provisions of Section
307.

SECTION 406. Securities Redeemed in Part.

Upon the surrender of any Security which is to be
redeemed only in part at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security
or Securities of the same series, of any authorized denomination
requested by such Holder and of like tenor and in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.

ARTICLE FIVE

Sinking Funds

SECTION 501. Applicability of Article.

The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of any series,
except as otherwise specified as contemplated by Section 301 for
Securities of such series.

The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred
to as a "mandatory sinking fund payment", and any payment in
excess of such minimum amount provided for by the terms of
Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of
Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 502.
Each sinking fund payment shall be applied to the redemption of
Securities of the series in respect of which it was made as
provided for by the terms of such Securities.

SECTION 502. Satisfaction of Sinking Fund Payments with
Securities.

The Company (a) may deliver to the Trustee Outstanding
Securities (other than any previously called for redemption) of a
series in respect of which a mandatory sinking fund payment is to
be made and (b) may apply as a credit Securities of such series
which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant
to the terms of such Securities or Outstanding Securities
purchased by the Company, in each case in satisfaction of all or
any part of such mandatory sinking fund payment with respect to
the Securities of such series; provided, however, that no
Securities shall be applied in satisfaction of a mandatory
sinking fund payment if such Securities shall have been
previously so applied. Securities so applied shall be received
and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.

SECTION 503. Redemption of Securities for Sinking Fund.

Not less than 45 days prior to each sinking fund payment
date for the Securities of any series, the Company shall deliver
to the Trustee an Officer's Certificate specifying:

(a) the amount of the next succeeding mandatory sinking
fund payment for such series;

(b) the amount, if any, of the optional sinking fund
payment to be made together with such mandatory sinking fund
payment;

(d) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by the payment of cash;

(e) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by delivering and crediting
Securities of such series pursuant to Section 502 and stating
the basis for such credit and that such Securities have not
previously been so credited, and the Company shall also
deliver to the Trustee any Securities to be so delivered. If
the Company shall not deliver such Officer's Certificate, the
next succeeding sinking fund payment for such series shall be
made entirely in cash in the amount of the mandatory sinking
fund payment. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner
specified in Section 403 and cause notice of the redemption
thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 404. Such notice
having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in
Sections 405 and 406.

ARTICLE SIX

Covenants

SECTION 601. Payment of Principal, Premium and Interest.

The Company shall pay the principal of and premium, if
any, and interest, if any (including Additional Interest), on the
Securities of each series in accordance with the terms of such
Securities and this Indenture.

SECTION 602. Maintenance of Office or Agency.

The Company shall maintain in each Place of Payment for
the Securities of each series an office or agency where payment
of such Securities shall be made, where the registration of
transfer or exchange of such Securities may be effected and where
notices and demands to or upon the Company in respect of such
Securities and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and
any change in the location, of each such office or agency and
prompt notice to the Holders of any such change in the manner
specified in Section 106. If at any time the Company shall fail
to maintain any such required office or agency in respect of
Securities of any series, or shall fail to furnish the Trustee
with the address thereof, payment of such Securities shall be
made, registration of transfer or exchange thereof may be
effected and notices and demands in respect thereof may be served
at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent for all such purposes in
any such event.

The Company may also from time to time designate one or
more other offices or agencies with respect to the Securities of
one or more series, for any or all of the foregoing purposes and
may from time to time rescind such designations; provided,
however, that, unless otherwise specified as contemplated by
Section 301 with respect to the Securities of such series, no
such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency for
such purposes in each Place of Payment for such Securities in
accordance with the requirements set forth above. The Company
shall give prompt written notice to the Trustee, and prompt
notice to the Holders in the manner specified in Section 106, of
any such designation or rescission and of any change in the
location of any such other office or agency.

Anything herein to the contrary notwithstanding, any
office or agency required by this Section may be maintained at an
office of the Company, in which event the Company shall perform
all functions to be performed at such office or agency.

SECTION 603. Money for Securities Payments to Be Held in Trust.

If the Company shall at any time act as its own Paying
Agent with respect to the Securities of any series, it shall, on
or before each due date of the principal of and premium, if any,
and interest, if any, on any of such Securities, segregate and
hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and premium or interest so
becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided. The Company shall
promptly notify the Trustee of any failure by the Company (or any
other obligor on such Securities) to make any payment of
principal of or premium, if any, or interest, if any, on such
Securities.

Whenever the Company shall have one or more Paying Agents
for the Securities of any series, it shall, on or before each due
date of the principal of and premium, if any, and interest, if
any, on such Securities, deposit with such Paying Agents sums
sufficient (without duplication) to pay the principal and premium
or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the
Company shall promptly notify the Trustee of any failure by it so
to act.

The Company shall cause each Paying Agent for the
Securities of any series, other than the Company or the Trustee,
to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent shall:

(a) hold all sums held by it for the payment of the
principal of and premium, if any, or interest, if any, on such
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;

(b) give the Trustee notice of any failure by the
Company (or any other obligor upon such Securities) to make
any payment of principal of or premium, if any, or interest,
if any, on such Securities; and

(c) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent and furnish to the Trustee such information as it
possesses regarding the names and addresses of the Persons
entitled to such sums.

The Company may at any time pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent and, if so stated
in a Company Order delivered to the Trustee, in accordance with
the provisions of Article Seven; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the
principal of and premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or, if
then held by the Company, shall be discharged from such trust;
and, upon such payment or discharge, the Holder of such Security
shall, as an unsecured general creditor and not as a Holder of an
Outstanding Security, look only to the Company for payment of the
amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to
the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such
money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will
be paid to the Company.

SECTION 604. Corporate Existence.

Subject to the rights of the Company under Article
Eleven, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence.

SECTION 605. Maintenance of Properties.

The Company shall cause (or, with respect to property
owned in common with others, make reasonable effort to cause) all
its properties used or useful in the conduct of its business to
be maintained and kept in good condition, repair and working
order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made
all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may
be necessary so that the business carried on in connection
therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from
discontinuing, or causing the discontinuance of, the operation
and maintenance of any of its properties if such discontinuance
is, in the judgment of the Company, desirable in the conduct of
its business.

SECTION 606. Annual Officer's Certificate as to Compliance.

Not later than September 15 in each year, commencing
September 15, 1996, the Company shall deliver to the Trustee an
Officer's Certificate which need not comply with Section 102,
executed by the principal executive officer, the principal
financial officer or the principal accounting officer of the
Company, as to such officer's knowledge of the Company's
compliance with all conditions and covenants under this
Indenture, such compliance to be determined without regard to any
period of grace or requirement of notice under this Indenture.

SECTION 607. Waiver of Certain Covenants.

The Company may omit in any particular instance to comply
with any term, provision or condition set forth in (a) Section
602 or any additional covenant or restriction specified with
respect to the Securities of any series, as contemplated by
Section 301, if before the time for such compliance the Holders
of at least a majority in aggregate principal amount of the
Outstanding Securities of all series with respect to which
compliance with Section 602 or such additional covenant or
restriction is to be omitted, considered as one class, shall, by
Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision
or condition and (b) Section 604, 605 or Article Eleven if before
the time for such compliance the Holders of at least a majority
in principal amount of Securities Outstanding under this
Indenture shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such term, provision or condition; but, in the case of (a) or
(b), no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of
the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and
effect; provided, however, so long as a Trust holds Securities of
any series, such Trust may not waive compliance or waive any
default in compliance by the Company with any covenant or other
term contained in this Indenture or the Securities of such series
without the approval of the holders of at least a majority in
aggregate liquidation preference of the outstanding Preferred
Securities issued by such Trust affected, obtained as provided in
the Trust Agreement pertaining to such Trust.

SECTION 608. Restriction on Payment of Dividends.

So long as any Preferred Securities of any series remain
outstanding, the Company shall not declare or pay any dividend
on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock, or make any
guarantee payments with respect to the foregoing (other than
payments under the Guarantee relating to such Preferred
Securities) if at such time (a) the Company shall be in default
with respect to its payment or other obligations under the
Guarantee relating to such Preferred Securities, (b) there shall
have occurred and be continuing a payment default (whether before
or after expiration of any period of grace) or an Event of
Default hereunder or (c) the Company shall have elected to extend
any interest payment period as provided in Section 311, and any
such period, or any extension thereof, shall be continuing.

SECTION 609. Maintenance of Trust Existence.

So long as Preferred Securities of any series remain
outstanding, the Company shall (i) maintain direct or indirect
ownership of all interests in the Trust which issued such
Preferred Securities, other than such Preferred Securities, (ii)
not voluntarily (to the extent permitted by law) dissolve,
liquidate or wind up such Trust, except in connection with a
distribution of the Securities to the holders of the Preferred
Securities in liquidation of such Trust, (iii) remain the sole
Depositor under the Trust Agreement (the "Depositor") of such
Trust and timely perform in all material respects all of its
duties as Depositor of such Trust, and (iv) use reasonable
efforts to cause such Trust to remain a business trust and
otherwise continue to be treated as a grantor trust for Federal
income tax purposes provided that any permitted successor to the
Company under this Indenture may succeed to the Company's duties
as Depositor of such Trust; and provided further that the Company
may permit such Trust to consolidate or merge with or into
another business trust or other permitted successor under the
Trust Agreement pertaining to such Trust so long as the Company
agrees to comply with this Section 609 with respect to such
successor business trust or other permitted successor.

SECTION 610. Rights of Holders of Preferred Securities.

The Company agrees that, for so long as any Preferred
Securities remain outstanding, its obligations under this
Indenture will also be for the benefit of the holders from time
to time of Preferred Securities, and the Company acknowledges and
agrees that such holders will be entitled to enforce this
Indenture, as third party beneficiaries, directly against the
Company to the same extent as if such holders of Preferred
Securities held a principal amount of Securities equal to the
stated liquidation amount of the Preferred Securities held by
such holders.

ARTICLE SEVEN

Satisfaction and Discharge

SECTION 701. Satisfaction and Discharge of Securities.

Any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for
all purposes of this Indenture, and the entire indebtedness of
the Company in respect thereof shall be deemed to have been
satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the
Company), in trust:

(a) money in an amount which shall be sufficient, or

(b) in the case of a deposit made prior to the Maturity
of such Securities or portions thereof, Government
Obligations, which shall not contain provisions permitting the
redemption or other prepayment thereof at the option of the
issuer thereof, the principal of and the interest on which
when due, without any regard to reinvestment thereof, will
provide moneys which, together with the money, if any,
deposited with or held by the Trustee or such Paying Agent,
shall be sufficient, or

to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof on or prior to Maturity; provided, however, that
in the case of the provision for payment or redemption of less
than all the Securities of any series, such Securities or
portions thereof shall have been selected by the Security
Registrar as provided herein and, in the case of a redemption,
the notice requisite to the validity of such redemption shall
have been given or irrevocable authority shall have been given by
the Company to the Trustee to give such notice, under
arrangements satisfactory to the Trustee; and provided, further,
that the Company shall have delivered to the Trustee and such
Paying Agent:

(x) if such deposit shall have been made prior to
the Maturity of such Securities, a Company Order stating
that the money and Government Obligations deposited in
accordance with this Section shall be held in trust, as
provided in Section 703; and

(y) if Government Obligations shall have been
deposited, an Opinion of Counsel that the obligations so
deposited constitute Government Obligations and do not
contain provisions permitting the redemption or other
prepayment at the option of the issuer thereof, and an
opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the
effect that the requirements set forth in clause (b)
above have been satisfied; and

(z) if such deposit shall have been made prior to
the Maturity of such Securities, an Officer's Certificate
stating the Company's intention that, upon delivery of
such Officer's Certificate, its indebtedness in respect
of such Securities or portions thereof will have been
satisfied and discharged as contemplated in this Section.

Upon the deposit of money or Government Obligations, or
both, in accordance with this Section, together with the
documents required by clauses (x), (y) and (z) above, the Trustee
shall, upon receipt of a Company Request, acknowledge in writing
that the Security or Securities or portions thereof with respect
to which such deposit was made are deemed to have been paid for
all purposes of this Indenture and that the entire indebtedness
of the Company in respect thereof has been satisfied and
discharged as contemplated in this Section. In the event that
all of the conditions set forth in the preceding paragraph shall
have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate
specified in clause (z) shall not have been delivered, such
Securities or portions thereof shall nevertheless be deemed to
have been paid for all purposes of this Indenture, and the
Holders of such Securities or portions thereof shall nevertheless
be no longer entitled to the benefits of this Indenture or of any
of the covenants of the Company under Article Six (except the
covenants contained in Sections 602 and 603) or any other
covenants made in respect of such Securities or portions thereof
as contemplated by Section 301, but the indebtedness of the
Company in respect of such Securities or portions thereof shall
not be deemed to have been satisfied and discharged prior to
Maturity for any other purpose, and the Holders of such
Securities or portions thereof shall continue to be entitled to
look to the Company for payment of the indebtedness represented
thereby; and, upon Company Request, the Trustee shall acknowledge
in writing that such Securities or portions thereof are deemed to
have been paid for all purposes of this Indenture.

If payment at Stated Maturity of less than all of the
Securities of any series is to be provided for in the manner and
with the effect provided in this Section, the Security Registrar
shall select such Securities, or portions of principal amount
thereof, in the manner specified by Section 403 for selection for
redemption of less than all the Securities of a series.

In the event that Securities which shall be deemed to
have been paid for purposes of this Indenture, and, if such is
the case, in respect of which the Company's indebtedness shall
have been satisfied and discharged, all as provided in this
Section do not mature and are not to be redeemed within the 60
day period commencing with the date of the deposit of moneys or
Government Obligations, as aforesaid, the Company shall, as
promptly as practicable, give a notice, in the same manner as a
notice of redemption with respect to such Securities, to the
Holders of such Securities to the effect that such deposit has
been made and the effect thereof.

Notwithstanding that any Securities shall be deemed to
have been paid for purposes of this Indenture, as aforesaid, the
obligations of the Company and the Trustee in respect of such
Securities under Sections 304, 305, 306, 404, 503 (as to notice
of redemption), 602, 603, 907 and 915 and this Article Seven
shall survive.

The Company shall pay, and shall indemnify the Trustee or
any Paying Agent with which Government Obligations shall have
been deposited as provided in this Section against, any tax, fee
or other charge imposed on or assessed against such Government
Obligations or the principal or interest received in respect of
such Government Obligations, including, but not limited to, any
such tax payable by any entity deemed, for tax purposes, to have
been created as a result of such deposit.

Anything herein to the contrary notwithstanding, (a) if,
at any time after a Security would be deemed to have been paid
for purposes of this Indenture, and, if such is the case, the
Company's indebtedness in respect thereof would be deemed to have
been satisfied or discharged, pursuant to this Section (without
regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the
money or Government Obligations, or combination thereof,
deposited with it as aforesaid to the Company or its
representative under any applicable Federal or State bankruptcy,
insolvency or other similar law, such Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction
and discharge of the Company's indebtedness in respect thereof
shall retroactively be deemed not to have been effected, and such
Security shall be deemed to remain Outstanding and (b) any
satisfaction and discharge of the Company's indebtedness in
respect of any Security shall be subject to the provisions of the
last paragraph of Section 603.

SECTION 702. Satisfaction and Discharge of Indenture.

This Indenture shall upon Company Request cease to be of
further effect (except as hereinafter expressly provided), and
the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture, when

(a) no Securities remain Outstanding hereunder; and

(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;

provided, however, that if, in accordance with the last paragraph
of Section 701, any Security, previously deemed to have been paid
for purposes of this Indenture, shall be deemed retroactively not
to have been so paid, this Indenture shall thereupon be deemed
retroactively not to have been satisfied and discharged, as
aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee
shall reasonably request to evidence and acknowledge the same.

Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company and the
Trustee under Sections 304, 305, 306, 404, 503 (as to notice of
redemption), 602, 603, 907 and 915 and this Article Seven shall
survive.

Upon satisfaction and discharge of this Indenture as pro-
vided in this Section, the Trustee shall assign, transfer and
turn over to the Company, subject to the lien provided by Section
907, any and all money, securities and other property then held
by the Trustee for the benefit of the Holders of the Securities
other than money and Government Obligations held by the Trustee
pursuant to Section 703.

SECTION 703. Application of Trust Money.

Neither the Government Obligations nor the money deposit-
ed pursuant to Section 701, nor the principal or interest
payments on any such Government Obligations, shall be withdrawn
or used for any purpose other than, and shall be held in trust
for, the payment of the principal of and premium, if any, and
interest, if any, on the Securities or portions of principal
amount thereof in respect of which such deposit was made, all
subject, however, to the provisions of Section 603; provided,
however, that, so long as there shall not have occurred and be
continuing an Event of Default any cash received from such
principal or interest payments on such Government Obligations, if
not then needed for such purpose, shall, to the extent prac-
ticable, be invested in Government Obligations of the type
described in clause (b) in the first paragraph of Section 701
maturing at such times and in such amounts as shall be sufficient
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof on and prior to the Maturity thereof, and inter-
est earned from such reinvestment shall be paid over to the
Company as received, free and clear of any trust, lien or pledge
under this Indenture except the lien provided by Section 907; and
provided, further, that, so long as there shall not have occurred
and be continuing an Event of Default, any moneys held in
accordance with this Section on the Maturity of all such
Securities in excess of the amount required to pay the principal
of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of
any trust, lien or pledge under this Indenture except the lien
provided by Section 907; and provided, further, that if an Event
of Default shall have occurred and be continuing, moneys to be
paid over to the Company pursuant to this Section shall be held
until such Event of Default shall have been waived or cured.

ARTICLE EIGHT

Events of Default; Remedies

SECTION 801. Events of Default.

"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events:

(a) failure to pay interest, if any, including any
Additional Interest, on any Security of such series within 30
days after the same becomes due and payable (whether or not
payment is prohibited by the provisions of Article Fifteen
hereof); provided, however, that a valid extension of the
interest payment period by the Company as contemplated in
Section 311 of this Indenture shall not constitute a failure
to pay interest for this purpose; or

(b) failure to pay the principal of or premium, if any,
on any Security of such series at its Maturity (whether or not
payment is prohibited by the provisions of Article Fifteen
hereof); or

(c) failure to perform or breach of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance of which or
breach of which is elsewhere in this Section specifically
dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 60 days
after there has been given, by registered or certified mail,
to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 33% in principal amount of
the Outstanding Securities of such series, 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, unless the Trustee, or the Trustee and the Holders
of a principal amount of Securities of such series not less
than the principal amount of Securities the Holders of which
gave such notice, as the case may be, shall agree in writing
to an extension of such period prior to its expiration;
provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Securities of such series,
as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by
the Company within such period and is being diligently
pursued; or

(d) the entry by a court having jurisdiction in the
premises of (1) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition by one or more Persons other than
the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official for the Company or for any substantial part
of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order for relief or any
such other decree or order shall have remained unstayed and in
effect for a period of 90 consecutive days; or

(e) the commencement by the Company of a voluntary case
or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in a case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company 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, or the authorization of such action by the
Board of Directors; or

(f) any other Event of Default specified with respect to
Securities of such series.

SECTION 802. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default due to the default in payment of
principal of, or interest on, any series of Securities or due to
the default in the performance or breach of any other covenant or
warranty of the Company applicable to the Securities of such
series but not applicable to all outstanding Securities shall
have occurred and be continuing, either the Trustee or the
Holders of not less than 33% in principal amount of the
Securities of such series may then declare the principal of all
Securities of such series and interest accrued thereon to be due
and payable immediately (provided that the payment of principal
and interest on such Securities shall remain subordinated to the
extent provided in Article Fifteen hereof). If an Event of
Default due to default in the performance of any other of the
covenants or agreements herein applicable to all Outstanding
Securities or due to certain events of bankruptcy, insolvency or
reorganization of the Company shall have occurred and be
continuing, either the Trustee or the Holders of not less than
33% in principal amount of all Securities then Outstanding
(considered as one class), and not the Holders of the Securities
of any one of such series, may declare the principal of all
Securities and interest accrued thereon to be due and payable
immediately (provided that the payment of principal and interest
on such Securities shall remain subordinated to the extent
provided in the Indenture).

At any time after such a declaration of acceleration with
respect to Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall
have been obtained by the Trustee as hereinafter in this Article
provided, the Event or Events of Default giving rise to such
declaration of acceleration shall, without further act, be deemed
to have been waived, and such declaration and its consequences
shall, without further act, be deemed to have been rescinded and
annulled, if

(a) the Company shall have paid or deposited with the
Trustee a sum sufficient to pay

(1) all overdue interest on all Securities of such
series;

(2) the principal of and premium, if any, on any
Securities of such series which have become due otherwise
than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Securities;

(3) to the extent that payment of such interest is
lawful, interest upon overdue interest, if any, at the
rate or rates prescribed therefor in such Securities;

(4) all amounts due to the Trustee under Section
907;

and

(b) any other Event or Events of Default with respect to
Securities of such series, other than the nonpayment of the
principal of Securities of such series which shall have become
due solely by such declaration of acceleration, shall have
been cured or waived as provided in Section 813.

No such rescission shall affect any subsequent Event of Default
or impair any right consequent thereon.

SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee.

If an Event of Default described in clause (a) or (b) of
Section 801 shall have occurred and be continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of the Securities of the series with respect to which
such Event of Default shall have occurred, the whole amount then
due and payable on such Securities for principal and premium, if
any, and interest, if any, and, to the extent permitted by law,
interest on premium, if any, and on any overdue principal and in-
terest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as
shall be sufficient to cover any amounts due to the Trustee under
Section 907.

If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of
an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.

If an Event of Default with respect to Securities of any
series shall have occurred and be continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.

SECTION 804. Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in
such proceeding or otherwise,

(a) to file and prove a claim for the whole amount of
principal, premium, if any, and interest, if any, owing and
unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for
amounts due to the Trustee under Section 907) and of the
Holders allowed in such judicial proceeding, and

(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same;

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amounts due it under Section 907.

Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.

SECTION 805. Trustee May Enforce Claims Without Possession of
Securities.

All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.

SECTION 806. Application of Money Collected.

Subject to the provisions of Article Fifteen, any money
collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account
of principal or premium, if any, or interest, if any, upon pre-
sentation of the Securities in respect of which or for the
benefit of which such money shall have been collected and the
notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

First: To the payment of all amounts due the Trustee
under Section 907;

Second: To the payment of the amounts then due and
unpaid upon the Securities for principal of and premium, if
any, and interest, if any, in respect of which or for the
benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal,
premium, if any, and interest, if any, respectively; and

Third: To the payment of the remainder, if any, to the
Company or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.

SECTION 807. Limitation on Suits.

No Holder shall have any right to institute any proceed-
ing, judicial or otherwise, with respect to this Indenture, or
for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

(a) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with
respect to the Securities of such series;

(b) the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of all series
in respect of which an Event of Default shall have occurred
and be continuing, considered as one class, shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee
hereunder;

(c) such Holder or Holders shall have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;

(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to
institute any such proceeding; and

(e) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period
by the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series in respect of which
an Event of Default shall have occurred and be continuing,
considered as one class;

it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders or
to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.

SECTION 808. Unconditional Right of Holders to Receive
Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal
of and premium, if any, and (subject to Section 307 and 311)
interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemp-
tion, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.

SECTION 809. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the
Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee
and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and
remedies of the Trustee and such Holder shall continue as though
no such proceeding had been instituted.

SECTION 810. Rights and Remedies Cumulative.

Except as otherwise provided in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

SECTION 811. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

SECTION 812. Control by Holders of Securities.

If an Event of Default shall have occurred and be
continuing in respect of a series of Securities, the Holders of a
majority in principal amount of the Outstanding Securities of
such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities,
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all such series, considered as one
class, shall have the right to make such direction, and not the
Holders of the Securities of any one of such series; and
provided, further, that such direction shall not be in conflict
with any rule of law or with this Indenture. Before proceeding
to exercise any right or power hereunder at the direction of such
Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with any such direction.

SECTION 813. Waiver of Past Defaults.

The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series may on behalf
of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its
consequences, except a default

(a) in the payment of the principal of or premium, if
any, or interest, if any, on any Security of such series, or

(b) in respect of a covenant or provision hereof which
under Section 1202 cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such
series affected;

provided, however, that so long as a Trust holds the Securities
of any series, such Trust may not waive any past default without
the consent of at least a majority in aggregate liquidation
preference of the outstanding Preferred Securities issued by such
Trust affected, obtained as provided in the Trust Agreement
pertaining to such Trust.

Upon any such waiver, such default shall cease to exist,
and any and all Events of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

SECTION 814. Undertaking for Costs.

The Company and the Trustee agree, and each Holder by his
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reason-
able attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company, to
any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than
10% in aggregate principal amount of the Outstanding Securities
of all series in respect of which such suit may be brought,
considered as one class, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or
premium, if any, or interest, if any, on any Security on or after
the Stated Maturity or Maturities expressed in such Security (or,
in the case of redemption, on or after the Redemption Date).

SECTION 815. Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.

ARTICLE NINE

The Trustee

SECTION 901. Certain Duties and Responsibilities.

(a) The Trustee shall have and be subject to all the
duties and responsibilities specified with respect to an
indenture trustee in the Trust Indenture Act and no implied
covenants or obligations shall be read into this Indenture
against the Trustee.

(b) No provision of this Indenture shall require the
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 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.

(c) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.

Notwithstanding anything contained in this Indenture to
the contrary, the duties and responsibilities of the Trustee
under this Indenture shall be subject to the protections and
limitations on liability afforded to the Trustee under this
Indenture and the Trust Indenture Act.

SECTION 902. Notice of Defaults.

The Trustee shall give notice of any default hereunder
with respect to the Securities of any series to the Holders of
Securities of such series in the manner and to the extent
required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 801(c),
no such notice to Holders shall be given until at least 45 days
after the occurrence thereof. 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.

SECTION 903. Certain Rights of Trustee.

Subject to the provisions of Section 901 and to the
applicable provisions of the Trust Indenture Act:

(a) the Trustee may rely and shall be protected in
acting or refraining from acting in good faith 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 or presented by the proper party or parties;

(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order, or as otherwise expressly provided herein, and
any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;

(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;

(d) the Trustee may consult with counsel 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;

(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at
the request or direction of any Holder pursuant to this
Indenture, unless such Holder shall have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with such request or direction;

(f) the 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, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall (subject to
applicable legal requirements) be entitled to examine, during
normal business hours, the books, records and premises of the
Company, personally or by agent or attorney;

(g) the 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 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;
and

(h) the Trustee shall not be charged with knowledge of
any Event of Default with respect to the Securities of any
series for which it is acting as Trustee unless either (1) a
Responsible Officer of the Trustee shall have actual knowledge
of the Event of Default or (2) written notice of such Event of
Default shall have been given to the Trustee by the Company,
any other obligor on such Securities or by any Holder of such
Securities.

SECTION 904. Not Responsible for Recitals or Issuance of
Securities.

The recitals contained herein and in the Securities (ex-
cept the Trustee's certificates of authentication) shall be taken
as the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes responsibility for their correct-
ness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds
thereof.

SECTION 905. May Hold Securities.

Each of the Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company,
in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it would
have if it were not the Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.

SECTION 906. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by
law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit of, the
Company.

SECTION 907. Compensation and Reimbursement.

The Company shall

(a) pay to the Trustee from time to time reasonable
compensation 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,
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except
to the extent that any such expense, disbursement or advance
may be attributable to the Trustee's negligence, wilful
misconduct or bad faith; and

(c) indemnify the Trustee for, and hold it harmless from
and against, any loss, liability or expense reasonably
incurred by it arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder
or the performance of its duties hereunder, 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, except
to the extent any such loss, liability or expense may be
attributable to its negligence, wilful misconduct or bad
faith.

As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior
to the Securities upon all property and funds held or collected
by the Trustee as such other than property and funds held in
trust under Section 703 (except as otherwise provided in Section
703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided, however, that the negligence,
wilful misconduct or bad faith of any Trustee hereunder shall not
affect the rights of any other Trustee hereunder.

SECTION 908. Disqualification; Conflicting Interests.

If the Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture Act, it shall
either eliminate such conflicting interest or resign to the
extent, in the manner and with the effect, and subject to the
conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee,
in its capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting interest
arising from its capacity as trustee in respect of the Securities
of any other series. The Trust Agreement and the Guarantee
Agreement pertaining to each Trust shall be deemed to be
specifically described in this Indenture for the purposes of
clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.

SECTION 909. Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which
shall be

(a) a corporation organized and doing business under the
laws of the United States, any State or Territory thereof or
the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authority, or

(b) if and to the extent permitted by the Commission by
rule, regulation or order upon application, a corporation or
other Person organized and doing business under the laws of a
foreign government, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus
of at least $50,000,000 or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,

and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, 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. If at any time the Trustee 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.

SECTION 910. Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable
requirements of Section 911.

(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 911 shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.

(c) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of
such series delivered to the Trustee and to the Company;
provided that so long as any Preferred Securities remain
outstanding, the Trust which issued such Preferred Securities
shall not execute any Act to remove the Trustee without the
consent of the holders of a majority in aggregate liquidation
preference of Preferred Securities issued by such Trust
outstanding, obtained as provided in the Trust Agreement
pertaining to such Trust.

(d) If at any time:

(1) the Trustee shall fail to comply with Section
908 after written request therefor by the Company or by
any Holder who has been a bona fide Holder for at least
six months, or

(2) the Trustee shall cease to be eligible under
Section 909 and shall fail to resign after written
request therefor by the Company or by any such Holder, or

(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver
of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

then, in any such case, (x) the Company by a Board Resolution may
remove the Trustee with respect to all Securities or (y) subject
to Section 814, any Holder who has been a bona fide Holder for at
least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.

(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office
of Trustee for any cause (other than as contemplated in clause
(y) in subsection (d) of this Section), with respect to the
Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of
Section 911. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the
applicable requirements of Section 911, become the successor
Trustee with respect to the Securities of such series and to
that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner
required by Section 911, any Holder who has been a bona fide
Holder of a Security of such series for at least six months
may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the
Securities of such series.

(f) So long as no event which is, or after notice or
lapse of time, or both, would become, an Event of Default
shall have occurred and be continuing, and except with respect
to a Trustee appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities pursuant to
subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a
successor Trustee, effective as of a date specified therein,
and (ii) an instrument of acceptance of such appointment,
effective as of such date, by such successor Trustee in
accordance with Section 911, the Trustee shall be deemed to
have resigned as contemplated in subsection (b) of this
Section, the successor Trustee shall be deemed to have been
appointed by the Company pursuant to subsection (e) of this
Section and such appointment shall be deemed to have been
accepted as contemplated in Section 911, all as of such date,
and all other provisions of this Section and Section 911 shall
be applicable to such resignation, appointment and acceptance
except to the extent inconsistent with this subsection (f).

(g) The Company shall give notice of each resignation
and each removal of the Trustee with respect to the Securities
of any series and each appointment of a successor Trustee with
respect to the Securities of any series by mailing written
notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and
addresses appear in the Security Register. Each notice shall
include the name of the successor Trustee with respect to the
Securities of such series and the address of its corporate
trust office.

SECTION 911. Acceptance of Appointment by Successor.

(a) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of all series, every
such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of all sums owed to it, execute
and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring
Trustee hereunder.

(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each
successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture
supplemental hereto wherein each successor 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 Trustee all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder
by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee, upon payment of all
sums owed to it, shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such
successor Trustee relates.

(c) Upon request of any such successor Trustee, the
Company shall execute any instruments which fully vest in and
confirm to such successor Trustee all such rights, powers and
trusts referred to in subsection (a) or (b) of this Section,
as the case may be.

(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.

SECTION 912. Merger, Conversion, Consolidation or Succession to
Business.

Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.

SECTION 913. Preferential Collection of Claims Against Company.

If the Trustee shall be or become a creditor of the
Company or any other obligor upon the Securities (other than by
reason of a relationship described in Section 311(b) of the Trust
Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:

(a) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or
bankers and payable upon demand;

(b) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purpose
of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or
obligation.

SECTION 914. Co-trustees and Separate Trustees.

At any time or times, for the purpose of meeting the
legal requirements of any applicable jurisdiction, the Company
and the Trustee shall have power to appoint, and, upon the
written request of the Trustee or of the Holders of at least 33%
in principal amount of the Securities then Outstanding, the
Company shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, 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 Company
does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default
shall have occurred and be continuing, the Trustee alone shall
have power to make such appointment.

Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so
appointed to more fully confirm 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 Company.

Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject
to the following conditions:

(a) the Securities shall be authenticated 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 Trustee hereunder, shall be exercised solely, by the
Trustee;

(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed either by the Trustee
or by the 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 in which any particular act
is to be performed, the 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;

(c) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Company, may
accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, if an Event of
Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of
the Company. Upon the written request of the Trustee, the
Company shall join with the Trustee in the execution and
delivery 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;

(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder; and

(e) any Act of Holders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and
separate trustee.

SECTION 915. Appointment of Authenticating Agent.

The Trustee may appoint an Authenticating Agent or Agents
with respect to the Securities of one or more series, which shall
be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon original issuance and upon
exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States,
any State or territory thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having
a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such Authenticating Agent 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 an Authenticating Agent
shall cease to be eligible in accordance with the provisions of
this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part
of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The
Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under
this Section, and the Trustee shall be entitled to be reimbursed
for such payments, in accordance with, and subject to the
provisions of Section 907.

The provisions of Sections 308, 904 and 905 shall be ap-
plicable to each Authenticating Agent.

If an appointment with respect to the Securities of one
or more series shall be made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate
certificate of authentication substantially in the following
form:

This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.

________________________
As Trustee

By______________________
As Authenticating Agent

By______________________
Authorized Signatory

If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not have
an office capable of authenticating Securities upon original
issuance located in a Place of Payment where the Company wishes
to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing
(which writing need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel), shall appoint, in
accordance with this Section and in accordance with such
procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of
Securities.

ARTICLE TEN

Holders' Lists and Reports by Trustee and Company

SECTION 1001. Lists of Holders.

Semiannually, not later than _______ and ___________ in
each year, commencing _______________, and at such other times as
the Trustee may request in writing, the Company shall furnish or
cause to be furnished to the Trustee information as to the names
and addresses of the Holders, and the Trustee shall preserve such
information and similar information received by it in any other
capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner
as shall be required by the Trust Indenture Act; provided,
however, that no such list need be furnished so long as the
Trustee shall be the Security Registrar.

SECTION 1002. Reports by Trustee and Company.

Not later than November 1 in each year, commencing
November 1, 1996, the Trustee shall transmit to the Holders and
the Commission a report, dated as of the next preceding September
15, with respect to any events and other matters described in
Section 313(a) of the Trust Indenture Act, in such manner and to
the extent required by the Trust Indenture Act. The Trustee
shall transmit to the Holders and the Commission, and the Company
shall file with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the Trust
Indenture Act must be filed with the Commission and furnished to
the Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such
manner, as shall be required by the Trust Indenture Act.

ARTICLE ELEVEN

Consolidation, Merger, Conveyance or Other Transfer

SECTION 1101. Company May Consolidate, etc., Only on Certain
Terms.

The Company shall not consolidate with or merge into any
other corporation, or convey or otherwise transfer or lease its
properties and assets substantially as an entirety to any Person,
unless

(a) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
Person organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia,
and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of
the principal of and premium, if any, and interest, if any, on
all Outstanding Securities and the performance of every
covenant of this Indenture on the part of the Company to be
performed or observed;

(b) immediately after giving effect to such transaction
no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have
occurred and be continuing; and

(c) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, conveyance, or other transfer
or lease and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for
relating to such transactions have been complied with.

SECTION 1102. Successor Corporation Substituted.

Upon any consolidation by the Company with or merger by
the Company into any other corporation or any conveyance, or
other transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section
1101, the successor corporation formed by such consolidation or
into which the Company is merged or the Person to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this
Indenture and the Securities Outstanding hereunder.

ARTICLE TWELVE

Supplemental Indentures

SECTION 1201. Supplemental Indentures Without Consent of
Holders.

Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities, all as
provided in Article Eleven; or

(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit
of the Holders of, or to remain in effect only so long as
there shall be Outstanding, Securities of one or more
specified series, or to surrender any right or power herein
conferred upon the Company; or

(d) to change or eliminate any provision of this
Indenture or to add any new provision to this Indenture;
provided, however, that if such change, elimination or
addition shall adversely affect the interests of the Holders
of Securities of any series Outstanding on the date of such
indenture supplemental hereto in any material respect, such
change, elimination or addition shall become effective with
respect to such series only pursuant to the provisions of
Section 1202 hereof or when no Security of such series remains
Outstanding; or

(e) to provide collateral security for all but not part
of the Securities; or

(f) to establish the form or terms of Securities of any
series as contemplated by Sections 201 and 301; or

(g) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto
representing interest, if any, thereon and for the procedures
for the registration, exchange and replacement thereof and for
the giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any and all other
matters incidental thereto; or

(h) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee with
respect to the Securities of one or more series and to add to
or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 911(b); or

(i) to provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all, or any series of, the Securities; or

(j) to change any place or places where (1) the
principal of and premium, if any, and interest, if any, on all
or any series of Securities shall be payable, (2) all or any
series of Securities may be surrendered for registration of
transfer, (3) all or any series of Securities may be
surrendered for exchange and (4) notices and demands to or
upon the Company in respect of all or any series of Securities
and this Indenture may be served; or

(k) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with
any other provision herein, or to make any other changes to
the provisions hereof or to add other provisions with respect
to matters or questions arising under this Indenture, provided
that such other changes or additions shall not adversely
affect the interests of the Holders of Securities of any
series in any material respect.

Without limiting the generality of the foregoing, if the
Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be
amended and

(x) if any such amendment shall require one or more
changes to any provisions hereof or the inclusion herein
of any additional provisions, or shall by operation of
law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, this Indenture
shall be deemed to have been amended so as to conform to
such amendment to the Trust Indenture Act, and the
Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental hereto to
effect or evidence such changes or additional provisions;
or

(y) if any such amendment shall permit one or more
changes to, or the elimination of, any provisions hereof
which, at the date of the execution and delivery hereof
or at any time thereafter, are required by the Trust
Indenture Act to be contained herein, this Indenture
shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee
may, without the consent of any Holders, enter into an
indenture supplemental hereto to evidence such amendment
hereof.

SECTION 1202. Supplemental Indentures With Consent of Holders.

With the consent of the Holders of not less than a major-
ity in aggregate principal amount of the Securities of all series
then Outstanding under this Indenture, considered as one class,
by Act of said Holders delivered to the Company and the Trustee,
the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this
Indenture or modifying in any manner the rights of the Holders of
Securities of such series under the Indenture; provided, however,
that if there shall be Securities of more than one series
Outstanding hereunder and if a proposed supplemental indenture
shall directly affect the rights of the Holders of Securities of
one or more, but less than all, of such series, then the consent
only of the Holders of a majority in aggregate principal amount
of the Outstanding Securities of all series so directly affected,
considered as one class, shall be required; and provided,
further, that no such supplemental indenture shall:

(a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on (except as
provided in Section 311 hereof), any Security, or reduce the
principal amount thereof or the rate of interest thereon (or
the amount of any installment of interest thereon) or change
the method of calculating such rate or reduce any premium
payable upon the redemption thereof, or change the coin or
currency (or other property), in which any Security or any
premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity of any Security (or,
in the case of redemption, on or after the Redemption Date),
without, in any such case, the consent of the Holder of such
Security, or

(b) reduce the percentage in principal amount of the
Outstanding Securities of any series (or, if applicable, in
liquidation preference of any series of Preferred Securities),
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with any provision of
this Indenture or of any default hereunder and its
consequences, or reduce the requirements of Section 1304 for
quorum or voting, without, in any such case, the consent of
the Holders of each Outstanding Security of such series, or

(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of
any series, except to increase the percentages in principal
amount referred to in this Section or such other Sections or
to provide that other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that
this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the
deletion of this proviso, in accordance with the requirements
of Sections 911(b) and 1201(h).

Notwithstanding the foregoing, so long as any of the Preferred
Securities remain outstanding, the Trustee may not consent to a
supplemental indenture under this Section 1202 without the prior
consent, obtained as provided in a Trust Agreement pertaining to
a Trust which issued such Preferred Securities, of the holders of
not less than a majority in aggregate liquidation preference of
all Preferred Securities issued by such Trust affected,
considered as one class, or, in the case of changes described in
clauses (a), (b) and (c) above, 100% in aggregate liquidation
preference of all such Preferred Securities then outstanding
which would be affected thereby, considered as one class. A
supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of
Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof. A waiver by a Holder of
such Holder's right to consent under this Section shall be deemed
to be a consent of such Holder.

SECTION 1203. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section
901) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may,
but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.

SECTION 1204. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by
this Article may restate this Indenture in its entirety, and,
upon the execution and delivery thereof, any such restatement
shall supersede this Indenture as theretofore in effect for all
purposes.

SECTION 1205. Conformity With Trust Indenture Act.

Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.

SECTION 1206. Reference in Securities to Supplemental
Indentures.

Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as
to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.

SECTION 1207. Modification Without Supplemental Indenture.

If the terms of any particular series of Securities shall
have been established in a Board Resolution or an Officer's
Certificate as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or the
elimination of any of such terms may be effected by means of a
supplemental Board Resolution or Officer's Certificate, as the
case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or
Officer's Certificate shall not be accepted by the Trustee or
otherwise be effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such
additions, changes or elimination were contained in a
supplemental indenture shall have been appropriately satisfied.
Upon the acceptance thereof by the Trustee, any such supplemental
Board Resolution or Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1204 and 1206.

ARTICLE THIRTEEN

Meetings of Holders; Action Without Meeting

SECTION 1301. Purposes for Which Meetings May Be Called.

A meeting of Holders of Securities of one or more, or
all, series may be called at any time and from time to time
pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or
taken by Holders of Securities of such series.

SECTION 1302. Call, Notice and Place of Meetings.

(a) The Trustee may at any time call a meeting of
Holders of Securities of one or more, or all, series for any
purpose specified in Section 1301, to be held at such time and
at such place in the Borough of Manhattan, The City of New
York, as the Trustee shall determine, or, with the approval of
the Company, at any other place. Notice of every such
meeting, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section
106, not less than 21 nor more than 180 days prior to the date
fixed for the meeting.

(b) If the Trustee shall have been requested to call a
meeting of the Holders of Securities of one or more, or all,
series by the Company or by the Holders of 33% in aggregate
principal amount of all of such series, considered as one
class, for any purpose specified in Section 1301, by written
request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 21 days after receipt
of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the
Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved by the
Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection
(a) of this Section.

(c) Any meeting of Holders of Securities of one or more,
or all, series shall be valid without notice if the Holders of
all Outstanding Securities of such series are present in
person or by proxy and if representatives of the Company and
the Trustee are present, or if notice is waived in writing
before or after the meeting by the Holders of all Outstanding
Securities of such series, or by such of them as are not
present at the meeting in person or by proxy, and by the
Company and the Trustee.

SECTION 1303. Persons Entitled to Vote at Meetings.

To be entitled to vote at any meeting of Holders of
Securities of one or more, or all, series a Person shall be (a) a
Holder of one or more Outstanding Securities of such series, or
(b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such
series by such Holder or Holders. The only Persons who shall be
entitled to attend any meeting of Holders of Securities of any
series shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.

SECTION 1304. Quorum; Action.

The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of the series with
respect to which a meeting shall have been called as hereinbefore
provided, considered as one class, shall constitute a quorum for
a meeting of Holders of Securities of such series; provided,
however, that if any action is to be taken at such meeting which
this Indenture expressly provides may be taken by the Holders of
a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series,
considered as one class, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Secu-
rities of such series, considered as one class, shall constitute
a quorum. In the absence of a quorum within one hour of the time
appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for
such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1305(e), notice
of the reconvening of any meeting adjourned for more than 30 days
shall be given as provided in Section 1302(a) not less than 10
days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series
which shall constitute a quorum.

Except as limited by Section 1202, any resolution pre-
sented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted only by the
affirmative vote of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of the series with
respect to which such meeting shall have been called, considered
as one class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture
expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of
the Outstanding Securities of such series, considered as one
class, may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Securities of such series,
considered as one class.

Any resolution passed or decision taken at any meeting of
Holders of Securities duly held in accordance with this Section
shall be binding on all the Holders of Securities of the series
with respect to which such meeting shall have been held, whether
or not present or represented at the meeting.

SECTION 1305. Attendance at Meetings; Determination of Voting
Rights; Conduct and Adjournment of Meetings.

(a) Attendance at meetings of Holders of Securities may
be in person or by proxy; and, to the extent permitted by law,
any such proxy shall remain in effect and be binding upon any
future Holder of the Securities with respect to which it was
given unless and until specifically revoked by the Holder or
future Holder of such Securities before being voted.

(b) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as
it may deem advisable for any meeting of Holders of Securities
in regard to proof of the holding of such Securities and of
the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct
of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the
holding of Securities shall be proved in the manner specified
in Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104. Such
regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 104 or other
proof.

(c) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the
meeting shall have been called by the Company or by Holders as
provided in Section 1302(b), in which case the Company or the
Holders of Securities of the series calling the meeting, as
the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Persons entitled
to vote a majority in aggregate principal amount of the
Outstanding Securities of all series represented at the
meeting, considered as one class.

(d) At any meeting each Holder or proxy shall be
entitled to one vote for each $1 principal amount of
Securities held or represented by him; provided, however, that
no vote shall be cast or counted at any meeting in respect of
any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman
of the meeting shall have no right to vote, except as a Holder
of a Security or proxy.

(e) Any meeting duly called pursuant to Section 1302 at
which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of all series represented
at the meeting, considered as one class; and the meeting may
be held as so adjourned without further notice.

SECTION 1306. Counting Votes and Recording Action of Meetings.

The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed
the signatures of the Holders or of their representatives by
proxy and the principal amounts and serial numbers of the
Outstanding Securities, of the series with respect to which the
meeting shall have been called, held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the
secretary of the meeting their verified written reports of all
votes cast at the meeting. A record of the proceedings of each
meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302
and, if applicable, Section 1304. Each copy shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

SECTION 1307. Action Without Meeting.

In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization,
direction, notice, consent, waiver or other action may be made,
given or taken by Holders by written instruments as provided in
Section 104.

ARTICLE FOURTEEN

Immunity of Incorporators, Stockholders, Officers and Directors

SECTION 1401. Liability Solely Corporate.

No recourse shall be had for the payment of the principal
of or premium, if any, or interest, if any, on any Securities, or
any part thereof, or for any claim based thereon or otherwise in
respect thereof, or of the indebtedness represented thereby, or
upon any obligation, covenant or agreement under this Indenture,
against any incorporator, stockholder, officer or director, as
such, past, present or future of the Company or of any
predecessor or successor corporation (either directly or through
the Company or a predecessor or successor corporation), whether
by virtue of any constitutional provision, statute or rule of
law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this
Indenture and all the Securities are solely corporate
obligations, and that no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, stockholder,
officer or director, past, present or future, of the Company or
of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor
corporation, because of the indebtedness hereby authorized or
under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the
Securities or to be implied herefrom or therefrom, and that any

such personal liability is hereby expressly waived and released
as a condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the Securities.

ARTICLE FIFTEEN

Subordination of Securities

SECTION 1501. Securities Subordinate to Senior Indebtedness.

The Company, for itself, its successors and assigns,
covenants and agrees, and each Holder of the Securities of each
series, by its acceptance thereof, likewise covenants and agrees,
that the payment of the principal of and premium, if any, and
interest, if any, on each and all of the Securities is hereby
expressly subordinated and subject to the extent and in the
manner set forth in this Article, in right of payment to the
prior payment in full of all Senior Indebtedness.

Each Holder of the Securities of each series, by its
acceptance thereof, authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article, and
appoints the Trustee its attorney-in-fact for any and all such
purposes.

SECTION 1502. Payment Over of Proceeds of Securities.

In the event (a) of any insolvency or bankruptcy
proceedings or any receivership, liquidation, reorganization or
other similar proceedings in respect of the Company or a
substantial part of its property, or of any proceedings for
liquidation, dissolution or other winding up of the Company,
whether or not involving insolvency or bankruptcy, or (b) subject
to the provisions of Section 1503, that (i) a default shall have
occurred with respect to the payment of principal of or interest
on or other monetary amounts due and payable on any Senior
Indebtedness, or (ii) there shall have occurred a default (other
than a default in the payment of principal or interest or other
monetary amounts due and payable) in respect of any Senior
Indebtedness, as defined therein or in the instrument under which
the same is outstanding, permitting the holder or holders thereof
to accelerate the maturity thereof (with notice or lapse of time,
or both), and such default shall have continued beyond the period
of grace, if any, in respect thereof, and, in the cases of
subclauses (i) and (ii) of this clause (b), such default shall
not have been cured or waived or shall not have ceased to exist,
or (c) that the principal of and accrued interest on the
Securities of any series shall have been declared due and payable
pursuant to Section 801 and such declaration shall not have been
rescinded and annulled as provided in Section 802, then:

(1) the holders of all Senior Indebtedness shall
first be entitled to receive payment of the full amount
due thereon, or provision shall be made for such payment
in money or money's worth, before the Holders of any of
the Securities are entitled to receive a payment on
account of the principal of or interest on the
indebtedness evidenced by the Securities, including,
without limitation, any payments made pursuant to
Articles Four and Five;

(2) any payment by, or distribution of assets of,
the Company of any kind or character, whether in cash,
property or securities, to which any Holder or the
Trustee would be entitled except for the provisions of
this Article, shall be paid or delivered by the person
making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of such Senior
Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to
the aggregate amounts remaining unpaid on account of such
Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness,
before any payment or distribution is made to the Holders
of the indebtedness evidenced by the Securities or to the
Trustee under this Indenture; and

(3) in the event that, notwithstanding the
foregoing, any payment by, or distribution of assets of,
the Company of any kind or character, whether in cash,
property or securities, in respect of principal of or
interest on the Securities or in connection with any
repurchase by the Company of the Securities, shall be
received by the Trustee or any Holder before all Senior
Indebtedness is paid in full, or provision is made for
such payment in money or money's worth, such payment or
distribution in respect of principal of or interest on
the Securities or in connection with any repurchase by
the Company of the Securities shall be paid over to the
holders of such Senior Indebtedness or their
representative or representatives or to the trustee or
trustees under any indenture under which any instruments
evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the
payment of all Senior Indebtedness remaining unpaid until
all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or
distribution (or provision therefor) to the holders of
such Senior Indebtedness.

Notwithstanding the foregoing, at any time after the
123rd day following the date of deposit of cash or Government
Obligations pursuant to Section 701 (provided all conditions set
out in such Section shall have been satisfied), the funds so
deposited and any interest thereon will not be subject to any
rights of holders of Senior Indebtedness including, without
limitation, those arising under this Article Fifteen; provided
that no event described in clauses (d) and (e) of Section 801
with respect to the Company has occurred during such 123-day
period.

For purposes of this Article only, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan or
reorganization or readjustment which are subordinate in right of
payment to all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article.
The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety,
to another corporation upon the terms and conditions provided for
in Article Eleven hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of
this Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with
the conditions stated in Article Eleven hereof. Nothing in
Section 1501 or in this Section 1502 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 907.

SECTION 1503. Disputes with Holders of Certain Senior
Indebtedness.

Any failure by the Company to make any payment on or
perform any other obligation in respect of Senior Indebtedness,
other than any indebtedness incurred by the Company or assumed or
guaranteed, directly or indirectly, by the Company for money
borrowed (or any deferral, renewal, extension or refunding
thereof) or any other obligation as to which the provisions of
this Section shall have been waived by the Company in the
instrument or instruments by which the Company incurred, assumed,
guaranteed or otherwise created such indebtedness or obligation,
shall not be deemed a default under clause (b) of Section 1502 if
(i) the Company shall be disputing its obligation to make such
payment or perform such obligation and (ii) either (A) no final
judgment relating to such dispute shall have been issued against
the Company which is in full force and effect and is not subject
to further review, including a judgment that has become final by
reason of the expiration of the time within which a party may
seek further appeal or review, or (B) in the event that a
judgment that is subject to further review or appeal has been
issued, the Company shall in good faith be prosecuting an appeal
or other proceeding for review and a stay or execution shall have
been obtained pending such appeal or review.

SECTION 1504. Subrogation.

Senior Indebtedness shall not be deemed to have been paid
in full unless the holders thereof shall have received cash (or
securities or other property satisfactory to such holders) in
full payment of such Senior Indebtedness then outstanding.
Subject to the prior payment in full of all Senior Indebtedness,
the rights of the Holders of the Securities shall be subrogated
to the rights of the holders of Senior Indebtedness to receive
any further payments or distributions of cash, property or
securities of the Company applicable to the holders of the Senior
Indebtedness until all amounts owing on the Securities shall be
paid in full; and such payments or distributions of cash,
property or securities received by the Holders of the Securities,
by reason of such subrogation, which otherwise would be paid or
distributed to the holders of such Senior Indebtedness shall, as
between the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment
by the Company to or on account of Senior Indebtedness, it being
understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.

SECTION 1505. Obligation of the Company Unconditional.

Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders the
principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms, or
is intended to or shall affect the relative rights of the Holders
and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the
Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article of the holders
of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.

Upon any payment or distribution of assets or securities
of the Company referred to in this Article, the Trustee and the
Holders shall be entitled to rely upon any order or decree of a
court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending
for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon, and all other facts pertinent thereto or to
this Article.

SECTION 1506. Priority of Senior Indebtedness Upon Maturity.

Upon the maturity of the principal of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all
matured principal of Senior Indebtedness and interest and
premium, if any, thereon shall first be paid in full before any
payment of principal or premium, if any, or interest, if any, is
made upon the Securities or before any Securities can be acquired
by the Company or any sinking fund payment is made with respect
to the Securities (except that required sinking fund payments may
be reduced by Securities acquired before such maturity of such
Senior Indebtedness).

SECTION 1507. Trustee as Holder of Senior Indebtedness.

The Trustee shall be entitled to all rights set forth in
this Article with respect to any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior
Indebtedness. Nothing in this Article shall deprive the Trustee
of any of its rights as such holder.

SECTION 1508. Notice to Trustee to Effectuate Subordination.

Notwithstanding the provisions of this Article or any
other provision of the Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee
unless and until the Trustee shall have received written notice
thereof from the Company, from a Holder or from a holder of any
Senior Indebtedness or from any representative or representatives
of such holder and, prior to the receipt of any such written
notice, the Trustee shall be entitled, subject to Section 901, in
all respects to assume that no such facts exist; provided,
however, that, if prior to the fifth Business Day preceding the
date upon which by the terms hereof any such moneys may become
payable for any purpose, or in the event of the execution of an
instrument pursuant to Section 702 acknowledging satisfaction and
discharge of this Indenture, then if prior to the second Business
Day preceding the date of such execution, the Trustee shall not
have received with respect to such moneys the notice provided for
in this Section, then, anything herein contained to the contrary
notwithstanding, the Trustee may, in its discretion, receive such
moneys and/or apply the same to the purpose for which they were
received, and shall not be affected by any notice to the
contrary, which may be received by it on or after such date;
provided, however, that no such application shall affect the
obligations under this Article of the persons receiving such
moneys from the Trustee.

SECTION 1509. Modification, Extension, etc. of Senior
Indebtedness.

The holders of Senior Indebtedness may, without affecting
in any manner the subordination of the payment of the principal
of and premium, if any, and interest, if any, on the Securities,
at any time or from time to time and in their absolute
discretion, agree with the Company to change the manner, place or
terms of payment, change or extend the time of payment of, or
renew or alter, any Senior Indebtedness, or amend or supplement
any instrument pursuant to which any Senior Indebtedness is
issued, or exercise or refrain from exercising any other of their
rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder, all without notice
to or assent from the Holders or the Trustee.

SECTION 1510. Trustee Has No Fiduciary Duty to Holders of Senior
Indebtedness.

With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and objectives as are specifically set forth in this
Indenture, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness,
and shall not be liable to any such holders if it shall
mistakenly pay over or deliver to the Holders or the Company or
any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or
otherwise.

SECTION 1511. Paying Agents Other Than the Trustee.

In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise require)
be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in
place of the Trustee; provided, however, that Sections 1507, 1508
and 1510 shall not apply to the Company if it acts as Paying
Agent.

SECTION 1512. Rights of Holders of Senior Indebtedness Not
Impaired.

No right of any present or future holder of Senior
Indebtedness to enforce the subordination herein shall at any
time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any noncompliance
by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.

SECTION 1513. Effect of Subordination Provisions; Termination.

Notwithstanding anything contained herein to the
contrary, other than as provided in the immediately succeeding
sentence, all the provisions of this Indenture shall be subject
to the provisions of this Article, so far as the same may be
applicable thereto.

Notwithstanding anything contained herein to the
contrary, the provisions of this Article Fifteen shall be of no
further effect, and the Securities shall no longer be
subordinated in right of payment to the prior payment of Senior
Indebtedness, if the Company shall have delivered to the Trustee
a notice to such effect. Any such notice delivered by the
Company shall not be deemed to be a supplemental indenture for
purposes of Article Twelve.

_________________________

This instrument may be executed in any number of counter-
parts, 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.

<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first
above written.

TEXAS UTILITIES ELECTRIC COMPANY

By:_________________________________

THE BANK OF NEW YORK, Trustee

By:_________________________________

<PAGE>

STATE OF _____________________ )
) ss.:
COUNTY OF ___________________ )

On the _____ day of _________, 1995, before me personally
came _________________, to me known, who, being by me duly sworn,
did depose and say that he is the _________________________ of
Texas Utilities Electric Company, one of the corporations de-
scribed in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that
he signed his name thereto by like authority.

________________________________
Notary Public
[Notarial Seal]

STATE OF _____________________ )
) ss.:
COUNTY OF ___________________ )

On the _____ day of ____________, 1995, before me
personally came _________________, to me known, who, being by me
duly sworn, did depose and say that he is a _________________ of
The Bank of New York, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his
name thereto by like authority.

________________________________
Notary Public
[Notarial Seal]

Exhibit 4(c)

GUARANTEE AGREEMENT

Between

Texas Utilities Electric Company
(as Guarantor)

and

The Bank of New York
(as Trustee)

dated as of

_____________ ___, 1995

<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 Securities . 4
SECTION 2.03 Reports by the Guarantee Trustee . . . . . 4
SECTION 2.04 Periodic Reports to Guarantee Trustee . . 4
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 . 5
SECTION 3.01 Powers and Duties of the Guarantee
Trustee . . . . . . . . . . . . . . . . 5
SECTION 3.02 Certain Rights of Guarantee Trustee . . . 7

ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . 9
SECTION 4.01 Guarantee Trustee; Eligibility . . . . . . 9
SECTION 4.02 Compensation and Reimbursement . . . . . . 9
SECTION 4.02 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . 10
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . 11
SECTION 5.01 Guarantee . . . . . . . . . . . . . . . . 11
SECTION 5.02 Waiver of Notice and Demand . . . . . . . 11
SECTION 5.03 Obligations Not Affected . . . . . . . . . 12
SECTION 5.04 Rights of Holders . . . . . . . . . . . . 12
SECTION 5.05 Guarantee of Payment . . . . . . . . . . . 13
SECTION 5.06 Subrogation . . . . . . . . . . . . . . . 13
SECTION 5.07 Independent Obligations . . . . . . . . . 13

ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . 13
SECTION 6.01 Subordination . . . . . . . . . . . . . . 13

ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . 14
SECTION 7.01 Termination . . . . . . . . . . . . . . . 14

ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . 14
SECTION 8.01 Successors and Assigns . . . . . . . . . . 14
SECTION 8.02 Amendments . . . . . . . . . . . . . . . . 14
SECTION 8.03 Notices . . . . . . . . . . . . . . . . . 14
SECTION 8.04 Benefit . . . . . . . . . . . . . . . . . 15
SECTION 8.05 Interpretation . . . . . . . . . . . . . . 16
SECTION 8.06 Governing Law . . . . . . . . . . . . . . 16

<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)

--------------
* 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 __________ __, 1995, is executed and delivered by Texas
Utilities Electric 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 Securities (as defined
herein) of TU Electric Capital I, a Delaware statutory business
trust (the "Issuer").

WHEREAS, pursuant to an Amended and Restated Trust
Agreement (the "Trust Agreement"), dated as of _________ __, 1995
among the Trustees of the Issuer named therein and Texas
Utilities Electric Company, as Depositor, the Issuer is issuing
as of the date hereof $___________ aggregate liquidation amount
of its ____% Trust Originated Preferred Securities (the
"Preferred Securities") representing ownership interests in the
Issuer and having the terms set forth in the Trust Agreement;

WHEREAS, the Preferred Securities are to be issued by
the Issuer to the Depositor (as defined in the Trust Agreement)
in exchange for $ ____ principal amount of Debentures (as defined
in the Trust Agreement); and

WHEREAS, the Preferred Securities are to be offered by
the Depositor in exchange for certain securities of the
Depositor, and

WHEREAS, in order to enhance the value of the Preferred
Securities, the Guarantor desires to irrevocably and
unconditionally 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.

"Common Securities" means the securities representing
common ownership interests in the assets of the Issuer.

"Event of Default" means a default by the Guarantor on
any of its payment obligations under this Guarantee Agreement.

"Guarantee Payments" shall mean the following payments
or distributions, without duplication, with respect to the
Preferred 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 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 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 a redemption of all of the Preferred Securities), the lesser
of (a) the aggregate of the liquidation amount and all accrued
and unpaid Distributions on the Preferred Securities to the date
of 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" shall mean any holder, as registered on the
books and records of the Issuer, of any Preferred Securities then
outstanding; provided, however, that in determining whether the
holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the
Guarantor.

"Indenture" means the Indenture dated as of __________,
1995, among the Guarantor (the "Debenture Issuer") and The Bank
of New York, as trustee pursuant to which the Debentures are
issued.

"Majority in liquidation amount of the Preferred
Securities" means a vote by Holders, voting separately as a
class, of more than 50% of the aggregate liquidation amount of
all Preferred Securities.

"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
Guarantor, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition
or covenant provided for in this Guarantee 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;

(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.

"Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.

"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.

"Successor Guarantee Trustee" means a successor
Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.01.

"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
Securities.

(a) The Guarantor shall furnish or cause to be
furnished to the Guarantee Trustee (a) semiannually, not later
than [___________] and [_________] 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) and Section 312(b) of
the Trust Indenture Act.

SECTION 2.03 Reports by the Guarantee Trustee.
Within 60 days after [______] of each year, commencing _______ ,
199__, 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. The Guarantee Trustee shall
also comply with the requirements of Sections 313(b), (c) and (d)
of the Trust Indenture Act.

SECTION 2.04 Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee such
documents, reports and information as required by Section 314 (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.

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 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 2.06 Events of Default; Waiver. The Holders
of a Majority in liquidation amount of Preferred 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, notices of all Events of
Default known to the Guarantee Trustee, unless such defaults have
been cured 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 the Guarantee Trustee
shall have received written notice, or a Responsible Officer
charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.

SECTION 2.08 Conflicting Interests. The Trust
Agreement and the Indenture 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) If an Event of Default has occurred and is
continuing, the Guarantee Trustee shall enforce this Guarantee
Agreement for the benefit of the Holders.

(c) The Guarantee Trustee, prior to the occurrence of
any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform 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), 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.

(d) 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

(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 or such
Responsible Officer 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 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 personal financial
liability in the performance of any of its duties 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 against such
risk or liability is not reasonably assured to it.

SECTION 3.02 Certain Rights of Guarantee Trustee.

(a) Subject to the provisions of Section 3.01:

(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 Officers' 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 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
Officers' Certificate which, upon receipt of such
request, 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
such 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 of
an Event of Default, of its obligation 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, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably
believed by it to be genuine, 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 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, (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 acting in accordance with such
instructions; and

(ix) 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.

(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.

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 and advances incurred or made
by the Guarantee Trustee in accordance with the provisions of
this Guarantee (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 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 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 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 delivery to the Guarantor of an
instrument of resignation, the resigning Guarantee Trustee 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.

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 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 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 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 any other sums
payable under the terms of the Preferred Securities or the
extension of time for the performance of any other
obligation under, arising out of, or in connection with, the
Preferred 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 Indenture);

(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred 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 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 Holders to give notice to, or
obtain consent of, the Guarantor 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) 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
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 as above
provided, any Holder may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Guarantee
Agreement without first instituting a legal proceeding against
the Issuer or any other person or entity.

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
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.

ARTICLE VII

TERMINATION

SECTION 7.01 Termination. This Guarantee Agreement
shall terminate and be of no further force and effect upon: (i)
full payment of the Redemption Price of all Preferred 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 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 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 Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that
is permitted under Article Eleven of the Indenture, the Guarantor
shall not assign its obligations hereunder.

SECTION 8.02 Amendments. Except with respect to any
changes which do not 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 Securities. The
provisions of Article Six of the Trust Agreement concerning
meetings of Holders shall apply to the giving of such approval.

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 Holders of the Preferred Securities:

Texas Utilities Electric 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 Trustee's) address set forth below or such
other address as the Administrative Trustees on behalf of
the Issuer may give notice of to the Holders:

TU Electric Capital I
c/o Texas Utilities Electric 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 Holders of the Preferred
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, 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
Securities.

SECTION 8.05 Interpretation. In this Guarantee
Agreement, unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement
but not defined in the preamble hereto have the respective
meanings assigned to them in Section 1.01;

(b) a term defined anywhere in this Guarantee
Agreement has the same meaning throughout;

(c) all references to "the Guarantee Agreement" or
"this Guarantee Agreement" are to this Guarantee Agreement
as modified, supplemented or amended from time to time;

(d) all references in this Guarantee Agreement to
Articles and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;

(e) 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;

(f) a reference to the singular includes the plural
and vice versa; and

(g) 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.

<PAGE>

THIS GUARANTEE AGREEMENT is executed as of the day and
year first above written.

Texas Utilities Electric Company

By:
----------------------------
Name:
Title:

The Bank of New York,
as Guarantee Trustee

By:
----------------------------
Name:
Title:

Exhibit 4(d)

AGREEMENT AS TO EXPENSES AND LIABILITIES

AGREEMENT dated as of ________ ___, 1995, between Texas
Utilities Electric Company, a Texas corporation ("TU Electric"),
and TU Electric Capital I, a Delaware business trust (the
"Trust").

WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive Debentures
from TU Electric and to issue its ___% Trust Originated Preferred
Securities, Series A (the "Preferred 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 ________ __, 1995 as the same may be amended
from time to time (the "Trust Agreement");

WHEREAS, TU Electric is the issuer of the Debentures;

NOW, THEREFORE, in consideration of the acceptance by
each holder of the Preferred Securities, which acceptance TU
Electric hereby agrees shall benefit TU Electric and which
acceptance TU Electric acknowledges will be made in reliance upon
the execution and delivery of this Agreement, TU Electric,
including in its capacity as holder of the Common Securities, and
the Trust hereby agree as follows:

ARTICLE I

Section 1.01. Assumption by TU Electric. Subject to
-------------------------
the terms and conditions hereof, TU Electric 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 (i) obligations of the Trust to pay to holders of any
Preferred Securities or other similar interests in the Trust the
amounts due such holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be
and (ii) obligations arising out of the negligence, willful
misconduct or bad faith of the Trustees of the Trust. 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 Securities or any Beneficiary must restore payment of
any sums paid under the Preferred Securities, under any
Obligation, under the Guarantee Agreement dated the date hereof
by TU Electric 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.

Section 1.03. Waiver of Notice. TU Electric hereby
----------------
waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and TU Electric
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 TU Electric 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.

There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, TU Electric with respect to the
happening of any of the foregoing.

Section 1.05. Enforcement. A Beneficiary may enforce
-----------
this Agreement directly against TU Electric and TU Electric
waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding
against TU Electric.

ARTICLE II

Section 2.01. Binding Effect. All guarantees and
--------------
agreements contained in this Agreement shall bind the successors,
assigns, receivers, trustees and representatives of TU Electric
and shall inure to the benefit of the Beneficiaries.

Section 2.02. Amendment. So long as there remains any
---------
Beneficiary or any Preferred Securities of any series are
outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the
Preferred Securities.

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:

TU Electric Capital I
c/o [Trustee]

Facsimile No.:
Attention:

Texas Utilities Electric Company

Facsimile No.:
Attention:

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).

THIS AGREEMENT is executed as of the day and year first
above written.

TEXAS UTILITIES ELECTRIC COMPANY

By:
----------------------------
Name:
Title:

TU ELECTRIC CAPITAL I

By:
----------------------------
Wayne Patterson
not in his individual
capacity, but solely
as Administrative Trustee

----------------------------
Cathryn Hulen
not in her individual
capacity, but solely
as Administrative Trustee

----------------------------
Michael Perkins
not in his individual
capacity, but solely
as Administrative Trustee

Exhibit 4(e)

TEXAS UTILITIES ELECTRIC COMPANY

OFFICER'S CERTIFICATE

________________, the _______________ of Texas Utilities
Electric Company (the "Company"), pursuant to the authority
granted in the Board Resolutions of the Company dated
____________, 1995, 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 Subordinated Debt Securities relating to Trust
Securities) dated as of __________, 1995 (the "Indenture") that:

1. The securities of the first series to be issued under
the Indenture shall be designated "____% Junior
Subordinated Debentures, Series __, due ____________,
2030" (the "Debentures of the First Series"). 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 Debentures of the First 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 First Series shall mature and the
principal shall be due and payable together with all
accrued and unpaid interest thereon on ____________,
2030;

4. The Debentures of the First Series shall bear interest
from the date of original issuance, at the rate of
____% per annum payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year
(each, an "Interest Payment Date") commencing _________,
1995. 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 and on the basis of the actual
number of days elapsed within any month in relation to
the deemed 30 days of such month. Interest on the
Debentures of the First Series will accrue from the
date of original issuance but if interest has been paid
on such Debentures of the First Series, then from the
most recent Interest Payment Date through 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), except that, if such Business
Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding
Business Day, 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
First Series shall be payable to the Person in whose
name such Debenture of the First Series is registered
at the close of business on the day 15 days preceding
the corresponding Interest Payment Date (the "Regular
Record Date") for the Debentures of the First Series;
provided, however, that if the Debentures of the First
Series are held neither by the Trust nor by a
securities depositary, 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 First Series not punctually paid
or duly provided for shall forthwith cease to be
payable to the Holders of such Debentures of the First
Series on such Regular Record Date, and may be paid to
the Persons in whose name the Debentures of the First
Series 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 Debentures of the First
Series 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 Debentures of the
First 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 First Series shall be payable at, and
registration of transfer, exchanges in respect of the
Debentures of the First Series may be effected at, the
office or agency of the Company in the City of Dallas;
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, demands to or
upon the Company in respect of the Debentures of the
First Series may be served at the office or agency of
the Company in The City of New York. The Trustee will
initially be the agency of the Company for such service
of notices and demands; provided, however, that the
Company reserves the right to change, by one or more
Officer's Certificates any such office or agency. The
Company will be the Security Registrar and the Paying
Agent for the Debentures of the First Series;

7. The Debentures of the First Series will be redeemable
on or after __________, 2001 at the option of the
Company, at any time and from time to time in whole or
in part, at a redemption price equal to 100% of the
principal amount of the Debentures of the First Series
being redeemed, together with any accrued interest,
including Additional Interest, if any, to the
redemption date, upon not less than 30 nor more than 60
days' notice given as provided in the Indenture. The
Company, however, may not redeem less than all
Outstanding Debentures of the First Series unless the
conditions specified in the second paragraph of item 8
below are met;

8. The Debentures of the First Series will also be
redeemable at the option of the Company if a Tax Event
shall occur and be continuing, in whole or in part, at
a redemption price plus accrued and unpaid
distributions equal to 100% of the principal amount of
the Debentures of the First Series then Outstanding
plus any accrued and unpaid interest, including
Additional Interest, if any, to the redemption date,
upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture. "Tax Event" means
any event or events as a result of which, 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 First Series, (ii) interest payable by the Company
on the Debentures of the First Series is not, or will
not be, fully deductible 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;

The Company may not redeem less than all the Debentures
of the First Series unless all accrued and unpaid
interest (including any Additional Interest) has been
paid in full on all Debentures Outstanding under the
Indenture for all quarterly interest periods
terminating on or prior to the date of redemption. No
notice of redemption with respect to the Debentures may
state that such redemption shall be conditional upon
the receipt of certain moneys as contemplated in the
third paragraph of Section 404 of the Indenture;

9. So long as any Debentures of the First Series are
Outstanding, the failure of the Company to pay interest
on any Debentures of the First 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 (10) of this Certificate shall not constitute
a failure to pay interest for this purpose;

10. 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 First Series,
to extend the interest payment period to a period not
exceeding 20 consecutive quarters (an "Extension
Period") during which period interest 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 First 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, redeem any
indebtedness that is pari passu with the Debentures of
the First Series, or make any guarantee payments with
respect to the foregoing. 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 quarters at any one time or extend beyond
the maturity date of the Debentures of the First
Series. Upon the termination of any such Extension
Period and the payment of all amounts then due, the
Company may select 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 the New York Stock Exchange
or other applicable self-regulatory organization of the
record date;

11. In the event that, at any time subsequent to the
initial authentication and delivery of the Debentures
of the First Series, the Debentures of the First Series
are to be held 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;

12. No service charge shall be made for the registration of
transfer or exchange of the Debentures of the First
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;

13. The Debentures of the First Series 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;

14. In the event that the Debentures of the First Series
are distributed to holders of ____% Trust Originated
Preferred Securities as a result of the occurrence of a
Tax Event, the Company will use its best efforts to
list the Debentures of the First Series on the New York
Stock Exchange;

15. The undersigned has read all of the covenants or
conditions contained in Sections 303, 301, 201 and 102
of the Indenture relating to the issuance of the
Debentures of the First Series and the definitions in
the Indenture relating thereto and in respect of which
this certificate is made;

16. 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;

17. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to express
an informed opinion whether or not such covenants or
conditions have been complied with; and

18. In the opinion of the undersigned, such covenants or
conditions have been complied with.

IN WITNESS WHEREOF, I have executed this Officer's
Certificate this ____ day of _________________, 1995.

______________________________
Name: [Authorized Officer]
Title:

<PAGE>

No._______________
Cusip No.__________

EXHIBIT A

[FORM OF FACE OF JUNIOR SUBORDINATED DEBENTURE]

TEXAS UTILITIES ELECTRIC COMPANY

____% JUNIOR SUBORDINATED DEBENTURES, SERIES __,
DUE ___________, 2030

TEXAS UTILITIES ELECTRIC COMPANY, a corporation duly
organized and existing under the laws of the State Texas (herein
referred to as the "Company", which term includes any successor
Person under the Indenture), for value received, hereby promises
to pay to ____________________________________, or registered
assigns, the principal sum of ____________________ Dollars on
____________, 2030, and to pay interest on said principal sum from
_________, 1995 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, quarterly on
March 31, June 30, September 30 and December 31 of each year,
commencing __________, 1995 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), except that, if such Business
Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case
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 15 days 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 [the City of
Dallas, the State of Texas], in such coin or currency of the
United States of America as at the time of payment is legal
tender for payment of public and private debts, provided,
however, that, at the option of the Company, interest on this
Security may be paid by check mailed to the address of the person
entitled thereto, as such address shall appear on the Security
Register.

Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

TEXAS UTILITIES ELECTRIC 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,
dated as of __________, 1995 (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 ___________, 1995 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 are subject to redemption
upon not less than 30 nor more than 60 days' notice by mail, at
any time on or after ________________ as a whole or in part, at
the election of the Company, at a Redemption Price equal to 100%
of the principal amount, together in the case of any such
redemption with accrued interest to, but not including, the
Redemption Date, but 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.

The Debentures of the First Series will also be
redeemable at the option of the Company if a Tax Event shall
occur and be continuing, in whole or in part, at a redemption
price plus accrued and unpaid distributions equal to 100% of the
principal amount of the Debentures of the First Series then
Outstanding plus any accrued and unpaid interest, including
Additional Interest, if any, to the redemption date, upon not
less than 30 nor more than 60 days' notice. "Tax Event" means
any event or events as a result of which, 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 First Series, (ii) interest
payable by the Company on the Debentures of the First Series is
not, or will not be, fully deductible 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.

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 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.

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 quarters (an "Extended Interest Payment Period"), and
at the end of such Extended Interest Payment Period, the Company
shall pay all interest then accrued and unpaid (together with
interest thereon at the same rate as specified for the Securities
of this series, compounded quarterly, to the extent permitted by
applicable law); provided, however, that during such Extended
Interest Payment 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, redeem any indebtedness that is pari passu with the
Securities of this series, or make any guarantee payments with
respect to the foregoing. Prior to the termination of any such
Extended Interest Payment Period, the Company may further extend
the interest payment period, provided that such Extended Interest
Payment Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters or
extend beyond the Stated Maturity of the Securities of this
series. Upon the termination of any such Extended Interest
Payment Period and the payment of all amounts then due, the
Company may select a new Extended Interest Payment Period,
subject to the above requirements. No interest during the
Extended Interest Payment Period, except at the end thereof,
shall be due and payable. The Company shall give the Holder of
this Security notice of its selection of such Extended Interest
Payment Period as provided in the Indenture.

The Securities of this series are issuable only in
registered form without coupons in denominations of $25 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.

[Clearing Agency Legend]

Exhibit 4(f)

Certificate Number Number of Preferred Securities

P- CUSIP NO.

Certificate Evidencing Preferred Securities

TU Electric Capital I

___% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)

TU Electric Capital I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that ____________ (the "Holder") is the
registered owner of _____ (_____) preferred securities of the
Trust representing an undivided beneficial interest in the assets
of the Trust and designated the TU Electric Capital I ___% Trust
Originated Preferred Securities, Series __ (liquidation amount
$25 per Preferred Security) (the "Preferred Securities"). The
Preferred 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 5.11 of the Trust Agreement
(as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and
the Preferred 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
_______ ___, 1995, as the same may be amended from time to time
(the "Trust Agreement") including the designation of the terms of
Preferred Securities as set forth therein. The holder of this
certificate is entitled to the benefits of the Guarantee
Agreement of Texas Utilities Electric Company, a Texas
corporation, and The Bank of New York, as guarantee trustee,
dated as of _______ ___, 1995 (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.

IN WITNESS WHEREOF, one of the Administrative Trustees
of the Trust has executed this certificate for and on behalf of
the Trust this ____ day of _________, 1995.

TU ELECTRIC CAPITAL I

By:
---------------------------
not in his (her) individual
capacity, but solely as
Administrative Trustee

<PAGE>

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and
transfers this Preferred Security to:

-----------------------------------------------------------------

-----------------------------------------------------------------
(Insert assignee's social security or tax identification number)

-----------------------------------------------------------------

-----------------------------------------------------------------
(Insert address and zip code of assignee)

and irrevocably appoints

-----------------------------------------------------------------

agent to transfer this Preferred Securities Certificate on the
books of the Trust. The agent may substitute another to act for
him or her.

Date:
------------------

Signature:
--------------------------

(Sign exactly as your name appears on the other side of this
Preferred Securities Certificate)

Exhibit 4(g)

LETTER OF TRANSMITTAL

To Tender $[ ] Depositary Shares (CUSIP [ ]), Series [ ],
each representing 1/4 share of
$[ ] Cumulative Preferred Stock (the "Depositary Shares"),

Texas Utilities Electric Company (the "Company").

Pursuant to the offer by the Company to exchange
for the Depositary Shares
either
___% Trust Originated Preferred Securities(SM) ("TOPrS(SM)")
issued by TU Electric Capital [ ] (the "Trust")
plus a cash component
or
cash only.

THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT MIDNIGHT,
NEW YORK CITY TIME, ON ______, 1995,
UNLESS THE OFFER IS EXTENDED.

The Exchange Agent for the Offer is:
Chemical Mellon Shareholder Services, L.L.C.

By Overnight Courier: By Mail:
(registered or certified mail
recommended)
Chemical Mellon Shareholder Chemical Mellon Shareholder
Services, L.L.C. Services, L.L.C.
Reorganization Department Reorganization Department
85 Challenger Road P.O. Box 817
Ridgefield Park, New Jersey 07660 Midtown Station
New York, New York 10018
By Hand:
By Facsimile: (201) 296-4293
Chemical Mellon Shareholder Confirm by Telephone:(201) 296-4209
Services, L.L.C.
Reorganization Department
120 Broadway
13th Floor
New York, New York 10271

<PAGE>

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.

Subject to the terms and conditions set forth in the
Prospectus and herein, the Company will accept for exchange any
and all Depositary Shares validly tendered and not withdrawn.

This Letter of Transmittal is to be completed by holders of
Depositary Shares, either (i) if certificates for Depositary
Shares are to be forwarded herewith or (ii) unless an Agent's
Message (as defined in the accompanying Prospectus of the Company
and the Trust dated _________, 1995 (as amended or supplemented
(including documents incorporated by reference), the
"Prospectus")) is utilized, if tenders of Depositary Shares are
to be made by book-entry transfer into the account of Chemical
Mellon Shareholder Services, L.L.C., as Exchange Agent (the
"Exchange Agent"), at The Depository Trust Company, Midwest
Securities Trust Company or Philadelphia Depository Trust Company
(together, the "Depository Institutions") pursuant to the
procedures described under THE EXCHANGE OFFER -- "Procedures for
Tendering" in the Prospectus. Holders of Depositary Shares who
tender Depositary Shares by book-entry transfer are referred to
herein as "Book-Entry Shareholders."

------------
(SM) "Trust Originated Preferred Securities" and "TOPrS" are
service marks of Merrill Lynch & Co.

Any holder of Depositary Shares who submits this Letter of
Transmittal and tenders Depositary Shares in accordance with the
instructions contained herein prior to the Expiration Date (as
defined in the Prospectus) will thereby have directed the Company
to deliver either, as specified below, ____% Trust Originated
Preferred Securities ("TOPrS") (the "Preferred Securities") of
the Trust plus a cash component or cash only in exchange for such
holder's Depositary Shares as set forth in the Prospectus.
Tenders of Depositary Shares pursuant to this Letter of
Transmittal are subject to withdrawal as described in the
Prospectus under the caption THE EXCHANGE OFFER -- "Withdrawal
of Tenders".

<PAGE>

-----------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
FOR PREFERRED SECURITIES PLUS A CASH COMPONENT
-----------------------------------------------------------------
Name(s) and Address(es)
of Registered Holder(s)
(Please fill in exactly Shares Tendered
as name(s) appear(s) (Attach additional
on certificate(s)) signed list if necessary)
-----------------------------------------------------------------
Total Number
of Shares
Represented Number of
Certificate by Shares
Number(s)* Certificate(s)* Tendered**
-----------------------------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
Total Shares
-----------------------------------------------------------------
* Need not be completed by shareholders tendering by book-
entry transfer.
** Unless otherwise indicated, it will be assumed that all
Shares represented by any certificates delivered to the
Exchange Agent are being tendered. See Instruction 4.
-----------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
FOR CASH ONLY
-----------------------------------------------------------------
Name(s) and Address(es)
of Registered Holder(s)
(Please fill in exactly Shares Tendered
as name(s) appear(s) (Attach additional
on certificate(s)) signed list if necessary)
------------------------------------------------------------------
Total Number
of Shares
Represented Number of
Certificate by Shares
Number(s)* Certificate(s)* Tendered**
-----------------------------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
Total Shares
------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-
entry transfer.
** Unless otherwise indicated, it will be assumed that all
Shares represented by any certificates delivered to the
Exchange Agent are being tendered. See Instruction 4.
-----------------------------------------------------------------

[ ] CHECK HERE IF TENDERED DEPOSITARY SHARES ARE BEING DELIVERED
BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT A
DEPOSITORY INSTITUTION AND COMPLETE THE FOLLOWING:

Name of Tendering Institution
----------------------------

Check Box of Book-Entry Transfer Facility:

[ ] The Depository Trust Company

[ ] Philadelphia Depository Trust Company

[ ] Midwest Securities Trust Company

<PAGE>

Account No.
---------------------------------------------

Transaction Code No.
-------------------------------------

[ ] CHECK HERE IF TENDERED DEPOSITARY SHARES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY
PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:

Name(s) of Tendering Shareholder(s)
----------------------

Date of Execution of Notice of Guaranteed Delivery
-------

Name of Institution which Guaranteed Delivery
------------

If delivery is by book-entry transfer:
--------------------

Name of Tendering Institution
---------------------------

Check Box of Book-Entry Transfer Facility:

[ ] The Depository Trust Company

[ ] Philadelphia Depository Trust Company

[ ] Midwest Securities Trust Company

Account No.
---------------------------------------------

Transaction Code No.
-------------------------------------

<PAGE>

SOLICITED TENDERS
(SEE INSTRUCTION 11)

The Company will pay to any Soliciting Dealer, as defined in
Instruction 11, a solicitation fee per Depositary Share validly
tendered and accepted for exchange pursuant to the Offer (as
herein defined).

The undersigned represents that the Soliciting Dealer which
solicited and obtained this tender is:

Name of Firm:
--------------------------------------------------
(Please Print)

Name of Individual Broker or Financial Consultant:
------------

Identification Number (if known):
------------------------------

Address:
-------------------------------------------------------

-------------------------------------------------------
(Include Zip Code)

The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that: (i) it has complied with
the applicable requirements of the Securities Exchange Act of
1934, as amended, and the applicable rules and regulations
thereunder, in connection with such solicitations; (ii) it is
entitled to such compensation for such solicitation under the
terms and conditions of the Offer; (iii) in soliciting tenders of
Depositary Shares, it has used no soliciting materials other than
those furnished by the Company; and (iv) if it is a foreign
broker or dealer not eligible for membership in the National
Association of Securities Dealers, Inc. (the "NASD"), it has
agreed to conform to the NASD's Rules of Fair Practice in making
solicitations outside the United States to the same extent as
though it were an NASD member.

SOLICITING DEALERS ARE NOT ENTITLED TO A FEE FOR DEPOSITARY
SHARES BENEFICIALLY OWNED BY SUCH SOLICITING DEALER.

NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to Texas Utilities Electric
Company (the "Company") the above-described Depositary Shares,
pursuant to the offer by the Company to exchange for any and all
of its $[ ] Depositary Shares, Series [ ] ("Depositary
Shares") of the Company, either Preferred Securities plus a cash
component, or cash only upon the terms and subject to the
conditions set forth in the Prospectus, receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which,
together with the Prospectus, constitute the "Offer").

Subject to and effective upon acceptance for exchange of the
Depositary Shares tendered herewith, the undersigned hereby
sells, exchanges, assigns and transfers to or upon the order of
the Company all right, title and interest in and to all the
Depositary Shares that are being tendered hereby and hereby
irrevocably constitutes and appoints the Exchange Agent as the
true and lawful agent and attorney-in-fact of the undersigned
with respect to

<PAGE>

such Depositary Shares, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled
with an interest), to (a) deliver certificates for such
Depositary Shares or transfer ownership of such Depositary Shares
on the account books maintained by a Depository Institution,
together, in any such case, with all accompanying evidences of
transfer and authenticity, to the Exchange Agent for the account
of the Company, (b) present such Depositary Shares for transfer
on the books of the Company and (c) receive all benefits and
otherwise exercise all rights of beneficial ownership of such
Depositary Shares, all in accordance with the terms of the Offer.

The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell,
exchange, assign and transfer the Depositary Shares tendered
hereby and to acquire the Preferred Securities, if any, issuable
upon the exchange of such tendered Depositary Shares and that,
when the undersigned's Depositary Shares are accepted for
exchange, the Company will acquire good and unencumbered title to
such shares of tendered Depositary Shares and the underlying
Preferred Stock, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim.
The undersigned will, upon request, execute and deliver any
additional documents deemed by the Company to be necessary or
desirable to complete the sale, exchange, assignment and transfer
of tendered Depositary Shares or transfer ownership of such
Depositary Shares.

All authority herein conferred or agreed to be conferred shall
survive the death, bankruptcy or incapacity of the undersigned
and every obligation of the undersigned hereunder shall be
binding upon the heirs, legal representatives, successors,
assigns, executors and administrators of the undersigned. Except
as stated in the Offer, this tender is irrevocable.

The undersigned understands that tenders of Depositary Shares
pursuant to any one of the procedures described in THE EXCHANGE
OFFER -- "Procedures for Tendering" in the Prospectus and in the
instructions hereto will constitute agreements between the
undersigned and the Company upon the terms and subject to the
conditions of the Offer.

Unless otherwise indicated under "Special Exchange and Payment
Instructions", please issue the check for any cash to be received
pursuant to the Offer and cause Preferred Securities to be
issued, and return any Depositary Shares not tendered for
exchange, in the name(s) of the undersigned (and, in the case of
Depositary Shares tendered by book-entry transfer, by credit to
the account at a Depository Institution). Similarly, unless
otherwise indicated under "Special Delivery Instructions", please
mail any certificates for Depositary Shares not tendered for
exchange (and accompanying documents, as appropriate), and any
certificates for Depositary Shares, to the undersigned at the
address shown below the undersigned's signature(s). If both
"Special Exchange and Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for any cash
to be received pursuant to the Offer and cause Preferred
Securities to be issued, and return any Depositary Shares not
tendered, in the name(s) of, and deliver any certificates for
such Depositary Shares to, the person(s) so indicated (and in the
case of Depositary Shares tendered by book-entry transfer, by
credit to the account at the Depository Institution so
indicated).

<PAGE>

-----------------------------------------------------------------
SPECIAL EXCHANGE AND PAYMENT
INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)

To be completed ONLY if check for any cash and certificates for
Preferred Securities are to be issued, or beneficial interests in
certificates representing Preferred Securities are to be
recorded, certificates for Depositary Shares not tendered for
exchange are to be issued in the name of someone other than the
undersigned.

Issue check and certificates for Preferred Securities and
certificates for Depositary Shares in the name of:

Name
------------------------------------------------------------
(Please Print)

Address
---------------------------------------------------------
(Zip Code)

Taxpayer Identification No.:
-----------------------------------
-----------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 7)

To be completed ONLY if certificates for Depositary Shares not
tendered and certificates for Preferred Securities are to be
mailed to someone other than the undersigned, or to the
undersigned at an address other than that shown below the
undersigned's signature(s).

Mail certificates for Depositary Shares and certificates for
Preferred Securities to:

Name:
------------------------------------------------------------
(Please Print)
Address:
---------------------------------------------------------
(Zip Code)

-----------------------------------------------------------------

SIGN HERE
(Please complete Substitute Form W-9 below)

>
-----------------------------------------------------------------
Signature(s) of Holder(s)

>
-----------------------------------------------------------------

Dated , 1995
----------

Name(s)
----------------------------------------------------------
(Please Print)

-----------------------------------------------------------------

Capacity (full title)
--------------------------------------------

Address
-------------------------------------------------------
(Include Zip Code)

-------------------------------------------------------

Area Code and Telephone No.
--------------------------------------

Taxpayer Identification No.
--------------------------------------

(Must be signed by the registered holder(s) exactly as name(s)
appear(s) on the certificate(s) for Depositary Shares or on a
security position listing or by person(s) authorized to become
registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, please
set forth full title and see Instruction 5).
-----------------------------------------------------------------

<PAGE>

-----------------------------------------------------------------
Guarantee of Signature(s)
(See Instructions 1 and 5)

Authorized Signature
---------------------------------------------

Name
------------------------------------------------------------
(Please Print)

Title
------------------------------------------------------------

Address
----------------------------------------------------------
(Include Zip Code)

Name of Firm
----------------------------------------------------

Area Code and Telephone No.
--------------------------------------

Dated , 1995
--------------------
-----------------------------------------------------------------

<PAGE>

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1. Guarantee of Signatures.
-----------------------

No signature guarantee is required on this Letter of
Transmittal (i) if tendered Depositary Shares are registered
in the name(s) of the undersigned and the Preferred
Securities to be issued in exchange therefor are to be
issued (and any Depositary Shares not tendered are to be
returned) in the name of the registered holder(s) (which
term, for the purposes described herein, shall include any
participant in a Depository Institution whose name appears
on a security listing as the owner of Depositary Shares) and
(ii) such holder(s) have not completed the instruction
entitled "Special Exchange and Payment Instructions" or
"Special Delivery Instructions" on this Letter of
Transmittal. If the tendered Depositary Shares are
registered in the name(s) of someone other than the
undersigned or if the Preferred Securities to be issued in
exchange therefor are to be issued (or Depositary Shares not
tendered are to be returned) in the name of any other
person, such tendered Depositary Shares must be endorsed or
accompanied by written instruments of transfer in form
satisfactory to the Company and duly executed by the
registered holder, and the signature on the endorsement or
instrument of transfer must be guaranteed by a financial
institution (including most banks, savings and loan
associations and brokerage houses) that is a participant in
the Security Transfer Agents Medallion Program or the Stock
Exchange Medallion Program (any of the foregoing hereinafter
referred to as an "Eligible Institution"). See
Instruction 5.

2. Delivery of Letter of Transmittal and Depositary Shares.
-------------------------------------------------------

This Letter of Transmittal is to be completed by holders of
Depositary Shares either if certificates are to be forwarded
herewith or, unless an Agent's Message (as defined in the
Prospectus) is utilized, if tenders are to be made pursuant
to the procedure for tender by book-entry transfer set forth
under THE EXCHANGE OFFER -- "Procedures for Tendering" and
"Book-Entry Transfer" in the Prospectus.

Certificates for Depositary Shares, or timely confirmation
(a "Book-Entry Confirmation") of a book-entry transfer of
such Depositary Shares into the Exchange Agent's account at
a Depository Institution, as well as this Letter of
Transmittal (or a facsimile hereof), properly completed and
duly executed, with any required signature guarantees, or an
Agent's Message in the case of a book-entry delivery, and
any other documents required by this Letter of Transmittal,
must be received by the Exchange Agent at one of its
addresses set forth herein prior to the Expiration Date.

If a holder of Depositary Shares desires to participate in
the Offer and time will not permit this Letter of
Transmittal or Depositary Shares to reach the Exchange Agent
before the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may
be effected if the Exchange Agent has received at one of the
addresses set forth herein prior to the Expiration Date, a
letter, telegram or facsimile transmission from an Eligible
Institution setting forth the name and address of the
tendering Holder, the name(s) in which the Depositary Shares
are registered and, if the Depositary Shares are held in
certificated form, the certificate numbers of the Depositary
Shares to be tendered, and stating that the tender is being
made thereby and guaranteeing that within three New York
Stock Exchange, Inc. ("NYSE") trading days after the date of
execution of such letter, telegram or facsimile transmission
by the Eligible Institution, the Depositary Shares in proper
form for transfer together with a properly completed and
duly executed Letter of Transmittal (and any other required
documents), or a confirmation of book-entry transfer of such
Depositary Shares into the Exchange Agent's account at a
Depository Institution, will be delivered by such Eligible
Institution. Unless the Depositary Shares being tendered by
the above-described method are deposited with the Exchange
Agent within the time period set forth above (accompanied or
preceded by a properly completed Letter of Transmittal and
any other required documents) or a confirmation of book-
entry transfer of such Depositary Shares into the Exchange
Agent's account at a Depository Institution in accordance
with such Depositary Institution's Automated Tender Offer
Program ("ATOP") procedures is received, the Company may, at
its option, reject the tender.

THE METHOD OF DELIVERY OF DEPOSITARY SHARES AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A DEPOSITORY
INSTITUTION, IS AT THE OPTION AND RISK OF THE TENDERING
SHAREHOLDER. IF CERTIFICATES FOR DEPOSITARY SHARES ARE SENT
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be
accepted, and no fractional Depositary Shares will be
accepted for exchange. By executing this Letter of
Transmittal (or facsimile hereof), the tendering holder
waives any right to receive any notice of the acceptance of
the Depositary Shares for exchange.

3. Inadequate Space.
----------------

If the space provided herein is inadequate, the certificate
numbers and/or the number of Depositary Shares should be
listed on a separate signed schedule attached hereto.

4. Partial Tenders.
---------------

(Not applicable to Book-Entry Shareholders). If fewer than
all the Depositary Shares represented by any certificate
delivered to the Exchange Agent are to be tendered, fill in
the number of Depositary Shares which are to be tendered in
the appropriate box entitled "Number of Shares Tendered".
In such case, a new certificate for the remainder of the
Depositary Shares represented by the old certificate will be
sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the appropriate box on this
Letter of Transmittal, as promptly as practicable following
the Expiration Date. All Depositary Shares represented by
certificates delivered to the Exchange Agent will be deemed
to have been tendered unless otherwise indicated.

5. Signatures on Letter of Transmittal; Stock Powers and
-----------------------------------------------------
Endorsements.
------------

If this Letter of Transmittal is signed by the registered
holder(s) of the Depositary Shares tendered hereby, the
signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement
or any change whatsoever.

If any of the Depositary Shares tendered hereby are held of
record by two or more persons, all such persons must sign
this Letter of Transmittal.

If any of the Depositary Shares tendered hereby are
registered in different names on different certificates, it
will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different
registrations of certificates.

If this Letter of Transmittal is signed by the registered
holder(s) of the Depositary Shares tendered hereby, no
endorsements of certificates or separate stock powers are
required unless Preferred Securities issued in exchange
therefor are to be issued, or Depositary Shares not tendered
or not exchanged are to be returned, in the name of any
person other than the registered holder(s). Signatures on
any such certificates or stock powers must be guaranteed by
an Eligible Institution.

If this Letter of Transmittal is signed by a person other
than the registered holder(s) of the Depositary Shares
tendered hereby, certificates must be endorsed or
accompanied by appropriate stock powers, in either case,
signed exactly as the name(s) of the registered holder(s)
appear(s) on the certificates for such Depositary Shares.
Signature(s) on any such certificates or stock powers must
be guaranteed by an Eligible Institution.

If this Letter of Transmittal or any certificate or stock
power is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Company of the authority
of such person so to act must be submitted.

6. Stock Transfer Taxes.
--------------------

The Company will pay all stock transfer taxes, if any,
applicable to the exchange of any Depositary Shares pursuant
to the Offer. If, however, certificates representing
Preferred Securities are to be delivered to, or Depositary
Shares not tendered or accepted for exchange, are to be
issued in the name of, any person other than the registered
holder of the Depositary Shares tendered or if a transfer
tax is imposed for any reason other than the exchange of
Depositary Shares pursuant to the Offer, then the amount of
any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering holder.

7. Special Exchange and Payment and Special Delivery
-------------------------------------------------
Instructions.
------------

If the check for any cash to be received pursuant to the
Offer and certificates representing Preferred Securities are
to be issued in the name of, and any Depositary Shares not
tendered are to be returned to, a person other than the
person(s) signing this Letter of Transmittal or any
certificates for Preferred Securities and certificates for
Depositary Shares not tendered are to be mailed to someone
other than the person(s) signing this Letter of Transmittal
or to the person(s) signing this Letter of Transmittal at an
address other than that shown above, the appropriate boxes
on this Letter of Transmittal should be completed.

8. Substitute Form W-9.
-------------------

Under the federal income tax laws, the Company or the Trust
may be required to withhold 31% of the amount of any
payments made to certain shareholders with respect to the
Depositary Shares or Preferred Securities. In order to
avoid such backup withholding, each tendering shareholder,
and, if applicable, each other payee, must provide such
shareholder's or payee's correct taxpayer identification
number and certify that such shareholder or payee is not
subject to such backup withholding by completing the
Substitute Form W-9 set forth above. In general, if a
shareholder or payee is an individual, the taxpayer
identification number is the Social Security number of such
individual. If the Company or the Trust is not provided
with the correct taxpayer identification numbers, the
shareholder or payee may be subject to a $50 penalty imposed
by the Internal Revenue Service. Certain shareholders or
payees (including, among others, all corporations and
certain foreign individual(s) are not subject to these
backup withholding and reporting requirements. In order to
satisfy the Company or the Trust that a foreign individual
qualifies as an exempt recipient, such shareholder or payee
must submit a statement, signed under penalties of perjury,
attesting to that individual's exempt status. For further
information concerning backup withholding and instructions
for completing the Substitute Form W-9 (including how to
obtain a taxpayer identification number if you do not have
one and how to complete the Substitute Form W-9 if Shares
are held in more than one name), consult the enclosed
Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.

9. Waiver of Conditions.
--------------------

The conditions of the Offer may be waived by the Company
from time to time in accordance with, and subject to the
limitations described in, the Prospectus.

10. Requests for Assistance or Additional Copies.
--------------------------------------------

Requests for assistance or additional copies of the
Prospectus and this Letter of Transmittal may be obtained
from the Company or the Information Agent at their
respective addresses or telephone numbers set forth below.

11. Solicited Tenders.
-----------------

The Company will pay to a Soliciting Dealer (as defined
herein) a solicitation fee per Depositary Share validly
tendered and accepted for exchange pursuant to the Offer.
For purposes of this Instruction 11, "Soliciting Dealer"
includes (i) any broker or dealer in securities, including
the Dealer Manager in its capacity as a dealer or broker,
who is a member of any national securities exchange or of
the National Association of Securities Dealers, Inc. (the
"NASD"), (ii) any foreign broker or dealer not eligible for
membership in the NASD who agrees to conform to the NASD's
Rules of Fair Practice in soliciting tenders outside the
United States to the same extent as though it were an NASD
member, or (iii) any bank or trust company, any one of whom
has solicited and obtained a tender pursuant to the Offer.
No such fee shall be payable to a Soliciting Dealer in
respect of Depositary Shares registered in the name of such
Soliciting Dealer unless such Depositary Shares are held by
such Soliciting Dealer as nominee and such Depositary Shares
are being tendered for the benefit of one or more beneficial
owners identified on the Letter of Transmittal or on the
Notice of Solicited Tenders (included in the materials
provided to brokers and dealers). No solicitation fee shall
be payable to a Soliciting Dealer with respect to the tender
of Depositary Shares unless the Letter of Transmittal
accompanying such tender designates such Soliciting Dealer
as such in the box captioned "Solicited Tenders".

If tendered Depositary Shares are being delivered by book-
entry transfer made to an account maintained by the Exchange
Agent with a Depository Institution, the Soliciting Dealer must
return a Notice of Solicited Tenders to the Exchange Agent within
three New York Stock Exchange trading days after the Expiration
Date in order to receive a solicitation fee. No solicitation fee
shall be payable to a Soliciting Dealer in respect of Depositary
Shares (i) beneficially owned by such Soliciting Dealer or (ii)
registered in the name of such Soliciting Dealer unless such
Depositary Shares are held by such Soliciting Dealer as nominee
and such Depositary Shares are being tendered for the benefit of
one or more beneficial owners identified on the Letter of
Transmittal or the Notice of Solicited Tenders. No solicitation
fee shall be payable to the Soliciting Dealer with respect to the
tender of Depositary Shares by the holder of record, for the
benefit of the beneficial owner, unless the beneficial owner has
designated such Soliciting Dealer.

<PAGE>

-----------------------------------------------------------------
Payer's Name: CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
-----------------------------------------------------------------

SUBSTITUTE

Form W-9

Department of the Treasury
Internal Revenue Service

Payor's Request for Taxpayer
Identification Number (TIN)
and Certification

-----------------------------------------------------------------
Part 1 PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY
BY SIGNING AND DATING BELOW
-----------------------------------------------------------------
Social Security Number OR Employer
Identification Number

TIN
--------------------------
-----------------------------------------------------------------

Name (Please Print)
---------------------------------------------

Address
---------------------------------------------------------

City State Zip Code
---------- --------- -------------------------
-----------------------------------------------------------------

Part 2

Awaiting TIN [ ]

-----------------------------------------------------------------
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I
CERTIFY THAT:

(1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me
but I have mailed or delivered an application to receive a
TIN or intend to so in the near future).
(2) I am not subject to backup withholding either because I have
not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result
of a failure to report all interest or dividends or the IRS
has notified me that I am no longer subject to backup
withholding, and
(3) all other information provided on this form is true, correct
and complete.
-----------------------------------------------------------------

SIGNATURE DATE
--------------------- --------------------------

You must cross out item (2) above if you have been notified by
the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax
return.
-----------------------------------------------------------------

NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE
FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF
31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO
THE PREFERRED SECURITIES. PLEASE REVIEW THE
ENCLOSED "GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9" FOR ADDITIONAL DETAILS.

<PAGE>

TEXAS UTILITIES ELECTRIC COMPANY

1601 Bryan Street
Dallas, Texas 75201
(214) 812-4600

The Information Agent for the Offer is:

D. F. King & Co., Inc.
77 Water Street
New York, New York 10005

(212) 269-5550 (collect)

(800) 697-6974 (Toll Free)

The Dealer Managers for the Offer are:

Merrill Lynch & Co. Goldman, Sachs & Co.
World Financial Center 85 Broad Street
South Tower New York, New York 10004
New York, New York 10281 (800) 828-3182 (Toll Free)
(212) 236-4565 (collect)

Lehman Brothers Inc. Smith Barney Inc.
3 World Financial Center 388 Greenwich Street
New York, New York 10285 New York, New York 10013
(800) 438-3242 (Toll-Free) (800) 813-3754 (Toll Free)

<PAGE>

EXHIBIT 12(b)

TEXAS UTILITIES ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS

TME Year Ended December 31,
September ----------------------------------------------------------------
1995 1994 1993 1992 1991 1990
--------- ---- ---- ---- ---- ----
Thousands of Dollars, Except Ratios
<S> <C> <C> <C> <C> <C> <C>
FIXED CHARGES:
Interest on mortgage bonds . . . . . . . . . . . . $ 538,954 $ 567,363 $ 610,999 $ 598,235 $ 608,729 $ 551,986
Interest on other long-term debt . . . . . . . . . 42,309 32,183 45,787 54,379 61,822 92,749
Amortization of debt discount, (premium)
and expense . . . . . . . . . . . . . . . . . 10,165 8,615 6,493 4,778 4,111 3,698
Amortization of loss on reaquired debt . . . . . . 18,791 17,608 12,471 9,301 5,052 4,635
Other interest charges . . . . . . . . . . . . . . 26,721 36,408 10,222 22,123 52,948 38,271
Rentals representative of the interest factor. . . 25,045 26,017 29,637 30,828 28,737 25,545
---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges. . . . . . . . . . . . . . $ 661,985 $ 688,194 $ 715,609 $ 719,644 $ 761,399 $ 716,884
Preferred dividends* . . . . . . . . . . . . . . . . 122,353 170,938 169,683 150,727 207,747 136,161
---------- ---------- ---------- ---------- ---------- ----------
Fixed Charges and preferred dividends. . . . . . . $ 784,338 $ 859,132 $ 885,292 $ 870,371 $ 969,146 $ 853,045
========== ========== ========== ========== ========== ==========

EARNINGS:
Net income $ 408,082 $ 658,192 $ 476,526 $ 821,123 $ (289,173) $ 964,276
Add:
Federal income taxes. . . . . . . . . . . . . . 183,553 146,633 96,951 29,049 76,073 57,930
Deferred federal income taxes - net . . . . . . 41,254 219,752 164,487 233,125 (232,464) 45,724
Federal investment tax credits - net. . . . . . (21,122) (23,698) (19,698) (20,322) (53,498) 33,841
Fixed charges . . . . . . . . . . . . . . . . . 661,985 688,194 715,609 719,644 761,399 716,884
---------- ---------- ---------- ---------- ---------- ----------
Total earnings. . . . . . . . . . . . . . . $1,273,752 $1,689,073 $1,433,875 $1,782,619 $ 262,337 $1,818,655
========== ========== ========== ========== ========== ==========

RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED DIVIDENDS. . . . . . . . . . . . . . 1.62 2.03 1.62 2.08 0.27** 2.13
</TABLE>

* Preferred dividends represent (1) the portion of preferred dividends
deductible for federal income tax purposes, plus (2) the balance of preferred
dividend requirements multiplied by the ratio that pre-tax income bears to
net income.

** The Company's earnings were inadequate to cover fixed charges and
preferred dividends for the twelve months ended December 31, 1991. The
deficiency was $706,809,000. The computation of the ratio of earnings to
fixed charges and preferred dividends does not include interest payments
made by affiliated companies on senior notes, which are recovered
currently through the fuel component of rates.

Exhibit 23(a)

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this
Registration Statement of Texas Utilities Electric Company ("the
Company") on Form S-4 of our report dated March 1, 1995 appearing
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 and to the reference to us under the heading
"Experts" in the Prospectus which is part of this Registration
Statement.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP

Dallas, Texas
November 6, 1995

Exhibit 99(a)

DEPOSITARY AGREEMENT

Date: November __, 1995

Chemical Mellon Shareholder Services, L.L.C.
450 West 33rd St. - 15th Floor
New York, NY 10001

Attn: Reorganization Department
-------------- ----------

Gentlemen:

Texas Utilities Electric Company, a Texas corporation (the
"Company"), is offering to exchange for any and all of certain
series of Depositary Shares (the "Shares") upon the terms and
conditions set forth in its Exchange Offers dated _______________
(the "Exchange Offers") and in the related Letters of Transmittal
(which shall include the Internal Revenue Service Form W-9),
copies of which are attached hereto as Exhibits A and B,
respectively, and which together, as they may be amended from
time to time, constitute the "Offer." The "Expiration Date" for
the Offer shall be _________ New York City time, on _____________
unless and until the Company shall have extended the period of
time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which
the Offer, as so extended by the Company from time to time, shall
expire. All terms not defined herein shall have the same meaning
as in the Offer.

The Company hereby agrees with you as follows:

1) Subject to the terms and conditions of this Agreement,
you will act as Exchange Agent (in such capacity, the
"Depositary") in connection with the Offer, and in such capacity
are authorized and directed to accept tenders of Shares.

2) (a) Tenders of Shares may be made only as set forth in
the Exchange Offer, and Shares shall be considered validly
tendered to you only if:

(i) you receive prior to the Expiration Date (x)
certificates for such Shares, (or a Confirmation (as defined in
paragraph (b) below) relating to such Shares) and (y) a properly
completed and duly executed Letter of Transmittal (or facsimile
thereof) or an Agent's Message (as defined in paragraph (b)
below) relating thereto; or

(ii) you receive (x) a Notice of Guaranteed Delivery
(as defined in paragraph (b) below) relating to such Shares from
an Eligible Institution (as defined in paragraph (b) below) prior
to the Expiration Date and (y) certificates for such Shares (or a
Confirmation relating to such Shares) and either a properly
completed and duly executed Letter of Transmittal (or facsimile
thereof) or an Agent's Message relating thereto at or prior to
P.M., New York City time, on the third New York Stock Exchange,
Inc. (the "NYSE") trading day after the date of execution of such
Notice of Guaranteed Delivery; and

(iii) in the case of either clause (i) or (ii)
above, a final determination of the adequacy of the items
received, as provided in Section 4 hereof, has been made by the
Company.

(b) For the purpose of this Agreement: (i) a
"Confirmation" shall be a confirmation of book-entry transfer of
Shares into your account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository
Trust Company (hereinafter collectively referred to as the
"Book-Entry Transfer Facilities") to be established and
maintained by you in accordance with Section 3 hereof, (ii) a
"Notice of Guaranteed Delivery" shall be a notice of guaranteed
delivery substantially in the form attached as Exhibit C hereto
or a telegram, telex, facsimile transmission or letter
substantially in such form, or if sent by a Book-Entry Transfer
Facility, a message transmitted through electronic means in
accordance with the usual procedures of such Book-Entry Transfer
Facility and the Depositary, substantially in such form;
provided, however, that if such notice is sent by a Book-Entry
Transfer Facility through electronic means, it must state that
such Book-Entry Transfer Facility has received an express
acknowledgment from the participant on whose behalf such notice
is given that such participant has received and agrees to become
bound by the form of such notice, (iii) an "Eligible Institution"
shall be a member firm of a national securities exchange
registered with the Securities and Exchange Commission or of the
National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States; and (iv) an "Agent's Message" shall be a message
transmitted through electronic means by a Book-Entry Transfer
Facility, in accordance with the normal procedures of such
Book-Entry Transfer Facility and the Depositary, to and received
by the Depositary and forming part of a Confirmation, which
states that such Book-Entry Transfer Facility has received an
express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of
such Confirmation that such participant has received and agrees
to be bound by the terms of the Letter of Transmittal, and that
the Company may enforce such agreement against such participant.
The term Agent's Message shall also include any hard copy
printout evidencing such message generated by a computer terminal
maintained at the Depositary's office.

(c) We acknowledge that in connection with the Offer
you may enter into agreements or arrangements with a Book-Entry
Transfer Facility which, among other things, provide that (i)
delivery of an Agent's Message will satisfy the terms of the
Offer with respect to the Letter of Transmittal, (ii) such
agreements or arrangements are enforceable against the Company by
such Book-Entry Transfer Facility or participants therein and
(iii) you, as Depositary, are authorized to enter into such
agreements or arrangements on behalf of the Company. Without
limiting any other provision of this Agreement, you are expressly
authorized to enter into any such agreements or arrangements on
behalf of the Company and to make any necessary representations
or warranties in connection thereunder, and any such agreement or
arrangement shall be enforceable against the Company.

3) You shall take steps to establish and, subject to such
establishments, maintain an account at each Book-Entry Transfer
Facility for book-entry transfers of Shares, as set forth in the
Letter of Transmittal, and you shall comply with the provisions
of Rule 17Ad-14 under the Securities Exchange Act of 1934, as
amended.

4) (a) You are authorized and directed to examine any
certificate representing Shares, Letter of Transmittal (or
facsimile thereof), Notice of Guaranteed Delivery or Agent's
Message and any other document required by the Letter of
Transmittal received by you to determine whether you believe any
tender may be defective. In the event you conclude that any
Letter of Transmittal, Notice of Guaranteed Delivery, Agent's
Message or other document has been improperly completed, executed
or transmitted, any of the certificates for Shares is not in
proper form for transfer (as required by the aforesaid
instructions) or if some other irregularity in connection with
the tender of Shares exists, you are authorized subject to
Section 4(b) hereof to advise the tendering stockholder, or
transmitting Book-Entry Transfer Facility, as the case may be, of
the existence of the irregularity, but you are not authorized to
accept any tender of fractional Shares, any tender not in
accordance with the terms and subject to the conditions set forth
in the Offer, or any other tender which you deem to be defective,
unless you shall have received from the Company the Letter of
Transmittal which was surrendered (or if the tender was made by
means of a Confirmation containing an Agent's Message, a written
notice), duly dated and signed by an authorized officer of the
Company, indicating that any defect or irregularity in such
tender has been cured or waived and that such tender has been
accepted by the Company.

(b) Promptly upon your concluding that any tender is
defective, you shall, after consultation with and on the written
instructions of the Company, use reasonable efforts in accordance
with your regular procedures to notify the person tendering such
Shares, or Book-Entry Transfer Facility transmitting the Agent's
Message, as the case may be, of such determination and, when
necessary, return the certificates involved to such person in the
manner described in Section 11 hereof. The Company shall have
full discretion to determine whether any tender is complete and
proper and shall have the absolute right to reject any or all
tenders of any particular Shares determined by it not to be in
proper form and to determine whether the acceptance of or payment
for such tenders may, in the opinion of counsel for the Company,
be unlawful; it being specifically agreed that you shall have
neither discretion nor responsibility with respect to these
determinations. To the extent permitted by applicable law, the
Company also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in the
tender of any particular Shares. The interpretation by the
Company of the terms and conditions of the Exchange Offer, the
Letter of Transmittal and the instructions thereto, a Notice of
Guaranteed Delivery or an Agent's Message (including without
limitation the determination of whether any tender is complete
and proper) shall be final and binding.

5) You are authorized and directed to return to any person
tendering Shares, in the manner described in Section 11 hereof,
any certificates representing Shares tendered by such person but
duly withdrawn pursuant to the Exchange Offer. To be effective,
a written, telegraphic, telex or facsimile transmission notice of
withdrawal must be received by you within the time period
specified for withdrawal in the Exchange Offer at your address
set forth on the back page of the Exchange Offer. Any notice of
withdrawal must specify the name of the person having deposited
the Shares to be withdrawn, the number of Shares to be withdrawn
and, if the certificates representing such Shares have been
delivered or otherwise identified to you, the name of the
registered holder(s) of such Shares as set forth in such
certificates. If the certificates have been delivered to you,
then prior to the release of such certificates the tendering
stockholder must also submit the serial numbers shown on the
particular certificates evidencing such Shares and the signature
on the notice of withdrawal must be guaranteed by an Eligible
Institution. You are authorized and directed to examine any
notice of withdrawal to determine whether you believe any such
notice may be defective. In the event you conclude that any such
notice is defective you shall, after consultation with and on the
instructions of the Company, use reasonable efforts in accordance
with your regular procedures to notify the person delivering such
notice of such determination. All questions as to the form and
validity (including time of receipt) of notices of withdrawal
will be determined by the Company in its sole discretion, whose
determination shall be final and binding. Any Shares so
withdrawn shall no longer be considered to be properly tendered
unless such Shares are re-tendered prior to the Expiration Date
pursuant to the Exchange Offer.

6) Subject to Sections 18 and 23 hereof, any amendment to
or extension of the Offer, as the Company shall from time to time
determine, shall be effective upon notice to you from the Company
given prior to the time the Offer would otherwise have expired,
and shall be promptly confirmed by the Company in writing;
provided that you may rely on and shall be authorized and
protected in acting or failing to act upon any such notice even
if such notice is not confirmed in writing or such confirmation
conflicts with such notice. If at any time the Offer shall be
terminated as permitted by the terms thereof, the Company shall
promptly notify you of such termination.

7) At 11:00 a.m. New York City time, or as promptly as
practicable thereafter on each business day, or more frequently
if reasonably requested as to major tally figures, you shall
advise each of the parties named below by telephone as to, based
upon your preliminary review (and at all times subject to final
determination by the Company), as of the close of business on the
preceding business day or the most recent practicable time prior
to such request, as the case may be: (i) the number of Shares
duly tendered on such day, (ii) the number of Shares duly
tendered represented by certificates physically held by you on
such day; (iii) the number of Shares represented by Notices of
Guaranteed Delivery on such day; (iv) the number of Shares
withdrawn on such day; and (v) the cumulative totals of Shares in
categories (i) thru (iv) above through 12:00 noon, New York City
time, on such day:

(a) Laura Anderson at the Company at (214) 812-3127

(b) ____________ at Merrill Lynch & Co. at (212) 449-____

You shall also furnish to each of the above-named persons a
written report confirming the above information which has been
communicated orally on the day following such oral communication.
You shall furnish to the Dealer-Managers (as defined in the
Exchange Offer), the Information Agent (as defined in the
Exchange Offer) and the Company, such reasonable information, to
the extent such information has been furnished to you, on the
tendering stockholders as may be requested from time to time.

You shall furnish to the Company, upon request, master lists of
Shares tendered for purchase, including an A-to-Z list of the
tendering stockholders.

You are also authorized and directed to provide the persons
listed above or any other persons approved by the Company with
such other information relating to the Shares, Exchange Offer,
Letters of Transmittal, Agent's Messages or Notices of Guaranteed
Delivery as the Company may reasonably request from time to time.

8) Letters of Transmittal, Notices of Guaranteed Delivery,
Agent's Messages, telegrams, telexes, facsimile transmissions,
notices and letters submitted to you pursuant to the Offer shall
be stamped by you to indicate the date and time of the receipt
thereof and these documents, or copies thereof, shall be
preserved by you for a reasonable time not to exceed one year or
the term of this Agreement, whichever is longer, and thereafter
shall be delivered by you to the Company. Thereafter, any
inquiries relating to or requests for any of the foregoing shall
be directed solely to the Company and not the Depositary.

9) (a) If under the terms and conditions set forth in the
Exchange Offer, the Company becomes obligated to accept and pay
for Shares tendered, upon instruction by the Company and as
promptly as practicable, but in any event not later than _____
p.m., New York City time, on the third NYSE trading day after the
latest of: (i) the Expiration Date; (ii) the physical receipt by
you of a certificate or certificates representing tendered Shares
(in proper form for transfer by delivery), a properly completed
and duly executed Letter of Transmittal (or a facsimile thereof)
or a Confirmation including an Agent's Message and any other
documents required by the Letter of Transmittal; and (iii) the
deposit by the Company with you of sufficient federal or other
immediately available funds to pay, subject to the terms and
conditions of the Offer, all stockholders for whom checks
representing payment for Shares are to be drawn, less any
adjustments required by the terms of the Offer, and all
applicable tax withholdings, you shall, subject to Section 16
hereof, deliver or cause to be delivered to the tendering
stockholders and designated payees, consistent with this
Agreement and the Letter of Transmittal, official bank checks of
the Depositary, as agent for the Company, and payable through the
Depositary in the amount of the applicable purchase price
specified in the Offer (less any applicable tax withholding) for
the Shares theretofore properly tendered and purchased under the
terms and conditions of the Offer. The Company will also deposit
with you on your request federal or other immediately available
funds in an amount equal to the total stock transfer taxes or
other governmental charges, if any, payable in respect of the
transfer or issuance to the Company or its nominee or nominees of
all Shares so purchased. Upon request by the Company you will
apply to the proper authorities for the refund of money paid on
account of such transfer taxes or other governmental charges. On
receipt of such refund, you will promptly pay over to the Company
all money refunded.

(b) At such time as you shall be notified by the Company,
you shall request the transfer agent for the Shares to effect the
transfer of all Shares purchased pursuant to the Offer and to
issue certificates for such Shares so transferred, in accordance
with written instructions from the Company, and upon your receipt
thereof notify the Company. The Company shall be responsible to
arrange for delivery of the certificates.

10) (a) On or before January 31st of the year following the
year in which the Company accepts Shares for payment, you will
prepare and mail to each tendering stockholder whose Shares were
accepted, other than stockholders who demonstrate their status as
nonresident aliens in accordance with United States Treasury
Regulations "Foreign Stockholders"), a Form 1099-B reporting the
purchase of Shares as of the date such Shares are accepted for
payment. You will also prepare and file copies of such Forms
1099-B by magnetic tape with the Internal Revenue Service in
accordance with Treasury Regulations on or before February 28th
of the year following the year in which the Shares are accepted
for payment.

(b) You will deduct and withhold 31% backup
withholding tax from the purchase price payable with respect to
Shares tendered by any stockholder, other than a Foreign
Stockholder, who has not properly provided you with his taxpayer
identification number, in accordance with Treasury Regulations.

(c) Should any issue arise regarding federal income
tax reporting or withholding, you will take such action as the
Company instructs you in writing.

11) If, pursuant to the terms and conditions of the Offer,
the Company has notified you that it does not accept certain of
the Shares tendered or purported to be tendered or a stockholder
withdraws any tendered Shares, you shall promptly return the
deposited certificates for such Shares, together with any other
documents received, to the person who deposited the same, without
expense to such person. Certificates for such unpurchased Shares
shall be forwarded by you, at your option, by: (i) first class
mail under a blanket surety bond protecting you, the Company from
losses or liabilities arising out of the non-receipt or
nondelivery of such Shares; or (ii) registered mail insured
separately for the value of such Shares. If any such Shares were
tendered or purported to be tendered by means of a Confirmation
containing an Agent's Message, you shall notify the Book-Entry
Transfer Facility that transmitted said Confirmation of the
Company's decision not to accept the Shares.

12) You shall take all reasonable action with respect to
the Offer as may from time to time be requested by the Company,
the Dealer-Managers or the Information Agent. You are authorized
to cooperate with and furnish information to the Dealer-Managers,
the Information Agent, any of their representatives or any other
organization (or its representatives) designated from time to
time by the Company, in any manner reasonably requested by any of
them in connection with the Offer and tenders thereunder.

13) Any instructions given to you orally, as permitted by
any provision of this Agreement, shall be confirmed in writing by
the Company, the Dealer-Managers or the Information Agent, as the
case may be, as soon as practicable. You shall not be liable or
responsible and shall be fully authorized and protected for
acting, or failing to act, in accordance with any oral
instructions which do not conform with the written confirmation
received in accordance with this Section.

14) Whether or not any Shares are tendered or the Offer is
consummated, for your services as Depositary hereunder we shall
pay to you compensation in accordance with the fee schedule
attached as Schedule 1 hereto, together with reimbursement for
out-of-pocket expenses, including reasonable fees and
disbursements of your counsel.

15) In the event any question or dispute arises with
respect to the proper interpretation of this Agreement or your
duties hereunder or the rights of the Company or of any
stockholders surrendering certificates for Shares pursuant to the
Offer, you shall not be required to act and shall not be held
liable or responsible for your refusal to act until the question
or dispute has been judicially settled (and you may, if you in
your sole discretion deem it advisable, but shall not be
obligated to, file a suit in interpleader or for a declaratory
judgement for such purpose) by final judgment rendered by a court
of competent jurisdiction, binding on all stockholders and
parties interested in the matter which is no longer subject to
review or appeal, or settled by a written document in form and
substance satisfactory to you and executed by the Company and
each such stockholder and party. In addition, you may require
for such purpose, but shall not be obligated to require, the
execution of such written settlement by all the stockholders and
all other parties that may have an interest in the settlement.

16) As Depositary hereunder you:

(a) shall have no duties or obligations other than those
specifically set forth herein or in Exhibits A, B, and C hereto,
or as may subsequently be agreed to in writing by you and the
Company;

(b) shall have no obligation to make payment for any
tendered Shares unless the Company shall have provided the
necessary federal or other immediately available funds to pay in
full amounts due and payable with respect thereto;

(c) shall be regarded as making no representations and
having no responsibilities as to the validity, sufficiency,
value, or genuineness of any certificates or the Shares
represented thereby deposited with you or tendered through an
Agent's Message hereunder and will not be required to and will
make no representations as to or be responsible for the validity,
sufficiency, value, or genuineness of the Offer;

(d) shall not be obligated to take any legal action
hereunder; if, however, you determine to take any legal action
hereunder, and, where the taking of such action might in your
judgment subject or expose you to any expense or liability, you
shall not be required to act unless you shall have been furnished
with an indemnity satisfactory to you;

(e) may rely on and shall be authorized and protected in
acting or failing to act upon any certificate, instrument,
opinion, notice, letter, telegram, telex, facsimile transmission,
Agent's Message or other document or security delivered to you
and believed by you to be genuine and to have been signed by the
proper party or parties;

(f) may rely on and shall be authorized ant protected in
acting or failing to act upon the written, telephonic, electronic
and oral instructions, with respect to any matter relating to
your actions as Depositary covered by this Agreement (or
supplementing or qualifying any such actions) of officers of the
Company;

(g) may consult counsel satisfactory to you, and the advice
of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered, or omitted
by you hereunder in good faith and in accordance with the advice
of such counsel;

(h) shall not be called upon at any time to advise any
person tendering or considering tendering pursuant to the Offer
as to the wisdom of making such tender or as to the market value
of any security tendered thereunder;

(i) may perform any of your duties hereunder either
directly or by or through agents or attorneys and you shall not
be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with reasonable care by you
hereunder;

(j) shall not be liable or responsible for any recital or
statement contained in the Offer or any other documents relating
thereto;

(k) shall not be liable or responsible for any failure of
the Company to comply with any of their respective obligations
relating to the Offer, including without limitation obligations
under applicable securities laws;

(l) are not authorized, and shall have no obligation, to
pay any brokers, dealers, or soliciting fees to any person,
including without limitation the Dealer-Managers or Information
Agent; and

(m) shall not be liable or responsible for any delay,
failure, malfunction, interruption or error in the transmission
or receipt of communications or messages through electronic means
to or from a Book-Entry Transfer Facility, or for the actions of
any other person in connection with any such message or
communication.

17) The Company covenants to indemnify and hold you and
your officers, directors, employees, agents, contractors,
subsidiaries and affiliates harmless from and against any loss,
liability, damage or expense (including without limitation any
loss, liability, damage or expense incurred for submitting for
transfer Shares tendered without a signature guarantee pursuant
to the Letter of Transmittal, or in connection with any
communication or message transmitted or purported to be
transmitted through electronic means to or from a Book-Entry
Transfer Facility, and the fees and expenses of counsel) incurred
(a) without negligence or bad faith or (b) as a result of your
acting or failing to act upon the instructions of the Company,
Dealer-Managers or Information Agent, arising out of or in
connection with the Offer, this Agreement or the administration
of your duties hereunder, including without limitation the costs
and expenses of defending and appealing against any action,
proceeding, suit or claim in the premises. In no case shall the
Company be liable under this indemnity with respect to any
action, proceeding, suit or claim against you unless the Company
shall be notified by you, by letter or by telex or facsimile
transmission confirmed by letter, of the written assertion of any
action, proceeding, suit or claim made or commenced against you,
promptly after you shall have been served with the summons or
other first legal process or have received the first written
insertion giving information as to the nature and basis of the
action, proceeding, suit or claim, but failure so to notify the
Company shall not release the Company of any liability which it
may otherwise have on account of this Agreement. The Company
shall be entitled to participate at its own expense in the
defense of any such action, proceeding, suit or claim. Anything
in this agreement to the contrary notwithstanding, in no event
shall you be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to
lost profits), even if you have been advised of the likelihood of
such loss or damage and regardless of the form of action.

18) Unless terminated earlier by the parties hereto, this
Agreement shall terminate upon (a) the Company's termination or
withdrawal of the Offer, (b) if the Company does not terminate or
withdraw the Offer, the date which is months after the later of
(i) your sending of checks to tendering stockholders in
accordance with Section 9(a) hereof and (ii) your delivery of
certificates to the Company in accordance with Section 9(b)
hereof or (c) if not terminated or withdrawn earlier, the date
which is two months after the date of this Agreement. Upon any
termination of this Agreement, you shall promptly deliver to the
Company any certificates, funds or property then held by you as
Depositary under this Agreement, and after such time any party
entitled to such certificates, funds or property shall look
solely to the Company and not the Depositary therefore, and all
liability of the Depositary with respect thereto shall cease,
provided, however, that the Depositary, before being required to
make such delivery to the Company, may at the expense of the
Company cause to be published in a newspaper of general
circulation in the City of New York, or mail to each person who
has tendered Shares but not received payment, or both, notice
that such certificates, funds or property remain unclaimed and
that after a date specified therein, which shall not be less than
30 days from the date of publication or mailing, any unclaimed
balance of such certificates, funds or property will be delivered
to the Company. Sections 14, 16 and 17 hereof shall survive any
termination of this Agreement.

19) In the event that any claim of inconsistency between
this Agreement and the terms of the Offer arise, as they may from
time to time be amended, the terms of the Offer shall control,
except with respect to the duties, liabilities and rights,
including without limitation compensation and indemnification, of
you as Depositary, which shall be controlled by the terms of this
Agreement.

20) If any provision of this Agreement shall be held
illegal, invalid, or unenforceable by any court, this Agreement
shall be construed and enforced as if such provision had not been
contained herein and shall be deemed an Agreement among us to the
full extent permitted by applicable law.

21) Except as expressly set forth elsewhere in this
Agreement, all notices, instructions and communication under this
Agreement shall be in writing, shall be effective upon receipt
and shall be addressed, if to the Company, to 1601 Bryan Street,
Dallas, Texas 75201, Attention: Treasurer, or, if to the
Depositary, to 450 West 33rd Street, New York, New York 10001,
Attention: Reorganization Department, or to such other address as
a party hereto shall notify the other parties.

22) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to conflict of laws rules or principles, and shall inure
to the benefit of and be binding upon the successors and assigns
of the parties hereto; provided that this Agreement may not be
assigned by any party without the prior written consent of all
other parties.

23) No provision of this Agreement may be amended, modified
or waived, except in a writing signed by all of the parties
hereto.

<PAGE>

Please acknowledge receipt of this Letter, the Exchange
Offers, the Letters of Transmittal, and the Notices of Guaranteed
Delivery, and confirm the arrangements herein provided by signing
and returning the enclosed copy hereof, whereupon this Agreement
and your acceptance of the terms and conditions herein provided
shall constitute a binding Agreement among us.

Very truly yours,

TEXAS UTILITIES ELECTRIC COMPANY

By: _____________________________

Accepted as of the date
above first written:

CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
as DEPOSITARY

By: _________________________________
Name: Martin J. Curran
Title: Assistant Vice President

<PAGE>

Exhibit A Exchange Offers
Exhibit B Letters of Transmittal
Exhibit C Notices of Guaranteed Delivery

Exhibit 99(b)

TEXAS UTILITIES ELECTRIC COMPANY

OFFER TO EXCHANGE FOR ANY OR ALL OF ITS

[ ]
$[ ] Depositary Shares, Series [ ]
each representing 1/4 share of
$[ ] Cumulative Preferred Stock

either
TU ELECTRIC CAPITAL __ or Cash Only
% Trust Originated Preferred Securities(SM) in the amount of $XX.XX
(TOPrS(SM))
(liquidation preference $25.00 per Preferred
Security
and guaranteed to the extent set forth herein
by Texas Utilities Electric Company)
plus a cash component of $X.XX
November , 1995

To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees

We have been appointed by Texas Utilities Electric Company
(the "Company") to act as Dealer Managers in connection with the
offer by the Company to exchange, upon the terms and subject to
the conditions set forth in the Prospectus referred to below and
the related Letter of Transmittal (which together constitute the
"Offer"), any and all of its $[ ] Depositary Shares, Series [
], each representing 1/4 share of $[ ] Cumulative Preferred
Stock (the "Depositary Shares") that are validly tendered and
accepted for exchange pursuant to the Offer for either % Trust
Originated Preferred Securities ("TOPrS")(the "Preferred
Securities") of TU Electric Capital __ (the "Trust") plus a cash
component or for cash only. In connection with the Offer, the
Company will deposit in the Trust as trust assets its ____%
Junior Subordinated Debentures due 2030 as set forth in the
Prospectus referred to below.

The Company will accept for exchange all Depositary Shares
validly tendered and not withdrawn, upon the terms and subject to
the conditions of the Offer, described in the Prospectus dated
November , 1995 (the "Prospectus").

For your information and for forwarding to your clients for
whom you hold Depositary Shares registered in your name or in the
name of your nominee, we are enclosing the following documents:

1. Prospectus dated November , 1995;

2. Letter of Transmittal for your use and for the
information of your clients, together with Guidelines for
Certification of Taxpayer Identification Number on Substitute
Form W-9 providing information relating to backup federal income
tax withholding;

3. Notice of Guaranteed Delivery to be used to accept the
Offer if the Depositary Shares and all other required documents
cannot be delivered to the Exchange Agent by the Expiration Date
(as defined in the Prospectus), or the book-entry transfer of the
Depositary Shares cannot be completed by the Expiration Date;

4. A form of letter that may be sent to your clients for
whose accounts you hold Depositary Shares registered in your name
or in the name of your nominee, with space provided for obtaining
such clients' instructions and designation of Soliciting Dealer
with regard to the Offer;

5. A Questions and Answers Booklet that may be provided to
your clients; and

6. Return envelope addressed to Chemical Mellon Shareholder
Services, L.L.C., the Exchange Agent.

--------------------
SM "Trust Originated Preferred Securities" and "TOPrS" are
service marks of Merrill Lynch & Co.

<PAGE>

WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON ________ , 1995, UNLESS THE OFFER IS EXTENDED.

NONE OF THE TRUST, ITS TRUSTEES, THE COMPANY OR THE COMPANY'S
BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO HOLDERS OF
DEPOSITARY SHARES AS TO WHETHER TO TENDER ALL OR ANY DEPOSITARY
SHARES IN THE OFFER OR TO ELECT TO RECEIVE AS CONSIDERATION
EITHER PREFERRED SECURITIES PLUS A CASH COMPONENT OR CASH ONLY.
HOLDERS OF DEPOSITARY SHARES ARE URGED TO CONSULT THEIR FINANCIAL
AND TAX ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE
IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.

The Company will pay a solicitation fee of $______ per
Depositary Share, in the case of Depositary Shares exchanged for
Preferred Securities plus cash, or $______ per Depositary Share,
in the case of Depositary Shares exchanged for cash only, for any
Depositary Shares tendered by physically delivering depositary
shares which are accepted for exchange and exchanged pursuant to
the Offer and covered by a Letter of Transmittal which
designates, as having solicited and obtained the tender, the name
of (i) any broker or dealer in securities, including each Dealer
Manager in its capacity as a broker or dealer, which is a member
of any national securities exchange or of the National
Association of Securities Dealers, Inc. (the "NASD"), (ii) any
foreign broker or dealer not eligible for membership in the NASD
which agrees to conform to the NASD's Rules of Fair Practice in
soliciting tenders outside the United States to the same extent
as though it were an NASD member, or (iii) any bank or trust
company (each of which is referred to herein as a "Soliciting
Dealer"). No solicitation fee shall be payable to a Soliciting
Dealer with respect to the tender of Depositary Shares by a
holder unless the Letter of Transmittal accompanying such tender
designates such Soliciting Dealer as such in the box captioned
"Solicited Tenders".

If tendered Depositary Shares are being delivered by book-
entry transfer made to an account maintained by the Exchange
Agent with the Depository Trust Company, Midwest Securities Trust
Company or Philadelphia Depository Trust Company, the Soliciting
Dealer must return a Notice of Solicited Tenders to the Exchange
Agent within three New York Stock Exchange trading days after the
Expiration Date in order to receive a solicitation fee. No
solicitation fee shall be payable to a Soliciting Dealer in
respect of Depositary Shares (i) beneficially owned by such
Soliciting Dealer or (ii) registered in the name of such
Soliciting Dealer unless such Depositary Shares are held by such
Soliciting Dealer as nominee and such Depositary Shares are being
tendered for the benefit of one or more beneficial owners
identified on the Letter of Transmittal or the Notice of
Solicited Tenders. No solicitation fee shall be payable to the
Soliciting Dealer with respect to the tender of Depositary Shares
by the holder of record, for the benefit of the beneficial owner,
unless the beneficial owner has designated such Soliciting
Dealer.

No solicitation fee shall be payable to a Soliciting Dealer if
such Soliciting Dealer is required for any reason to transfer any
portion of such fee to a tendering holder (other than itself).
No broker, dealer, bank, trust company or fiduciary shall be
deemed to be the agent of the Company, the Exchange Agent, the
Information Agent or the Dealer Managers for purposes of the
Offer.

The Company will upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and necessary
costs and expenses incurred by them in forwarding materials to
their customers. The Company will pay all stock transfer taxes
applicable to the acceptance of Depositary Shares pursuant to the
Offer, subject to Instruction 6 of the Letter of Transmittal.

Soliciting Dealers should take care to ensure proper record-
keeping to document their entitlement to any solicitation fee.

Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed materials may
be obtained from, the Information Agent or the undersigned at the
addresses and telephone numbers set forth in the back cover of
the Prospectus.

Very truly yours,

MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
SMITH BARNEY INC.
<PAGE>

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU THE AGENT OF THE COMPANY, THE TRUST, THE
TRUSTEES OF THE TRUST, THE DEALER MANAGERS, THE INFORMATION
AGENT OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF
OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.

<PAGE>

NOTICE OF SOLICITED TENDERS

List below the number of Depositary Shares whose tender you
have solicited. All Depositary Shares beneficially owned by a
beneficial owner, whether in one account or several, and in
however many capacities, must be aggregated for purposes of
completing the tables below. Any questions as to what
constitutes beneficial ownership should be directed to the
Exchange Agent. If the space below is inadequate, list the
Depositary Shares on a separate signed schedule and affix the
list to this Notice of Solicited Tenders. PLEASE DO NOT COMPLETE
THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
EXCHANGE AGENT".

ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE
EXCHANGE AGENT AT THE ADDRESS SET FORTH ON THE BACK COVER OF
THE PROSPECTUS. ALL QUESTIONS CONCERNING THE NOTICES OF
SOLICITED TENDERS SHOULD BE DIRECTED TO THE INFORMATION
AGENT AT THE TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF
THE PROSPECTUS.

SOLICITED TENDERS OF DEPOSITARY SHARES NOT BENEFICIALLY OWNED BY
SOLICITING DEALER EXCHANGED FOR PREFERRED SECURITIES PLUS CASH

To be
To be To be To be Completed
Completed Completed Completed Only
by the by the Only by by
Soliciting Soliciting Exchange Exchange
Dealer Dealer Agent Agent

Number of Number of Fee $__
Beneficial Shares VOI Ticket Shares per
Owners Tendered Number* Accepted Share
------ -------- ------ -------- -----

Beneficial
Owner No.1
Beneficial
Owner No.2
Beneficial
Owner No.3
Beneficial
Owner No.4
Beneficial
Owner No.5
Total

SOLICITED TENDERS OF DEPOSITARY SHARES NOT BENEFICIALLY OWNED BY
SOLICITING DEALER EXCHANGED FOR CASH ONLY

To be
To be To be To be Completed
Completed Completed Completed Only
by the by the Only by by
Soliciting Soliciting Exchange Exchange
Dealer Dealer Agent Agent

Number of Number of Fee $__
Beneficial Shares VOI Ticket Shares per
Owners Tendered Number* Accepted Share
------ -------- ------ -------- -----

Beneficial
Owner No.1
Beneficial
Owner No.2
Beneficial
Owner No.3
Beneficial
Owner No.4
Beneficial
Owner No.5
Total

-------------
* Complete if Depositary Shares delivered by book-entry
transfer.

All questions as to the validity, form and eligibility
(including time of receipt) of Notices of Solicited Tenders will
be determined by the Exchange Agent, in its sole discretion,
which determination will be final and binding. Neither the
Exchange Agent nor any other person will be under any duty to
give notification of any defects or irregularities in any Notice
of Solicited Tenders or incur any liability for failure to give
such notification.

The undersigned hereby confirms that: (i) it has complied
with the applicable requirements of the Securities Exchange Act
of 1934, and the applicable rules and regulations thereunder, in
connection with such solicitation; (ii) it is entitled to such
compensation for such solicitation under the terms and conditions
of the Prospectus; (iii) in soliciting tenders of Depositary
Shares, it has used no soliciting materials other than those
furnished by the Company; and (iv) if it is a foreign broker or
dealer not eligible for membership in the NASD, it has agreed to
conform to the NASD's Rules of Fair Practice in making
solicitations outside the United States to the same extent as
though it were an NASD member.

------------------------------
(Name of Firm)

------------------------------
(Authorized Signature)

------------------------------
(Area Code and Telephone Number)

------------------------------
(Address)

------------------------------
(City, State, Zip Code)

------------------------------
(Attention)

Date:
-------------

DO NOT SEND STOCK CERTIFICATES WITH THIS FORM.
YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF
TRANSMITTAL.

Exhibit 99(c)

TEXAS UTILITIES ELECTRIC COMPANY

OFFER TO EXCHANGE FOR ANY OR ALL OF ITS

[ ]
$[ ] Depositary Shares, Series [ ]
each representing 1/4 share of
$[ ] Cumulative Preferred Stock
either

TU ELECTRIC CAPITAL __ or Cash Only
% Trust Originated Preferred Securities(SM) in the amount of $XX.XX
(TOPrS(SM))
(liquidation preference $25.00 per Preferred
Security
and guaranteed to the extent set forth herein
by Texas Utilities Electric Company)
plus a cash component of $X.XX

November , 1995

To Our Clients:

Enclosed for your consideration are the Prospectus dated
November , 1995 (the "Prospectus") and the related Letter of
Transmittal (which together constitute the "Offer") in connection
with the Offer by Texas Utilities Electric Company (the
"Company") to exchange any and all of its $_____ Depositary
Shares, Series A, each representing 1/4 share of $____ Cumulative
Preferred Stock (the "Depositary Shares"), that are validly
tendered and accepted for exchange pursuant to the Offer for
either __% Trust Originated Preferred Securities (TOPrS)(the
"Preferred Securities") of TU Electric Capital __ (the "Trust")
plus the cash component specified above, or for cash only in the
amount per Depositary Share specified above. In connection with
the Offer, the Company will deposit in the Trust as trust assets
its ____% Junior Subordinated Debentures due 2030 as set forth in
the Prospectus.

(SM) "Trust Originated Preferred Securities" and "TOPrS" are
service marks of Merrill Lynch & Co.

We are the holder of record of Depositary Shares held for your
account. A tender of such Depositary Shares can be made only by
us as the holder of record and pursuant to your instructions.
The Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Depositary
Shares held by us for your account.

We request instructions as to whether you wish us to tender
any or all of the Depositary Shares held by us for your account,
and as to whether you wish to receive Preferred Securities plus a
cash component or cash only, upon the terms and subject to the
conditions set forth in the Prospectus and the Letter of
Transmittal. We also request that you designate, in the box
captioned "Soliciting Tenders", any Soliciting Dealer who
solicited your tender of Depositary Shares.

Your attention is invited to the following:

1. The Offer and withdrawal rights expire at 12:00 Midnight,
New York City time, on ______, 1995, unless the Offer is
extended.

2. The Company expressly reserves the right to (i) extend,
amend or modify the terms of the Offer with respect to the
Depositary Shares in any manner and (ii) withdraw or terminate
the Offer with respect to the Depositary Shares and not accept
for exchange any Depositary Shares, at any time prior to the
Expiration Date with respect to the Depositary Shares for any
reason, including (without limitation) if fewer than 100,000
Depositary Shares would remain outstanding upon acceptance of
those tendered in the Offer (which condition may be waived by the
Company). Any amendment applicable to the Offer will apply to
all Depositary Shares tendered pursuant to the Offer. The
minimum period during which the Offer must remain open following
material changes in the terms of the Offer or the information
concerning the Offer, other than a change in the percentage of
securities sought or the price, depends upon the facts and
circumstances, including the relative materiality of such terms
or information. See "The Exchange Offer Expiration Date;
Extensions; Amendments; Termination" in the Prospectus.

3. Any stock transfer taxes applicable to the exchange of
Depositary Shares pursuant to the Offer will be paid by the
Company, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.

Please note that a Questions and Answers booklet is enclosed
for your information.

If you wish to have us tender any or all of your Depositary
Shares, please so instruct us by completing, executing, detaching
and returning to us the instruction form on the detachable part
hereof. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Depositary Shares, all
such Depositary Shares will be tendered unless otherwise
specified on the detachable part hereof. Your instructions
should be forwarded to us in ample time to permit us to submit a
tender on your behalf by the Expiration Date.

THE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE
ACCEPTED FROM OR ON BEHALF OF, HOLDERS OF DEPOSITARY SHARES
IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR
ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS
OF SUCH JURISDICTION. IN THOSE JURISDICTIONS THE LAWS OF
WHICH REQUIRE THAT THE OFFER BE MADE BY A LICENSED BROKER OR
DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF
THE TRUST BY MERRILL LYNCH & CO., GOLDMAN, SACHS & CO.,
LEHMAN BROTHERS INC. AND SMITH BARNEY INC. OR ONE OR MORE
REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF
SUCH JURISDICTION.

Instructions with Respect to the Offer
The undersigned acknowledge(s) receipt of your letter and the
enclosed Prospectus dated November , 1995 and the related
Letter of Transmittal in connection with the Offer by the Company
to exchange Preferred Securities plus a cash component or cash
only for Depositary Shares that are validly tendered and accepted
for exchange.

This will instruct you to tender the number of Depositary
Shares indicated below held by you for the account of the
undersigned, upon the terms and subject to the conditions set
forth in the Prospectus and the related Letter of Transmittal.

Preferred Securities Tender

[ ] By checking this box, all Depositary Shares held by you
for our account will be tendered in the Offer in exchange
for Preferred Securities plus a cash component. If fewer
than all Depositary Shares are to be so tendered, we have
checked the box and indicated below the aggregate number
of Depositary Shares to be tendered by you.
_______________shares(1)

Cash Only Tender

[ ] By checking this box, all Depositary Shares held by you
for our account, will be tendered in the Offer in
exchange for cash only. If fewer than all Depositary
Shares are to be so tendered, we have checked the box and
indicated below the aggregate number of Depositary Shares
to be tendered by you. _______________shares(1)

---------------
1. Unless otherwise indicated, it will be assumed that all
Depositary Shares held by us for your account are to be so
tendered.

<PAGE>

Please designate in the box below any Soliciting Dealer who
solicited your tender.

SOLICITED TENDERS

The undersigned represents that the Soliciting Dealer who
solicited and obtained this tender is:

-----------------------------------------------------------------
Name of Firm:
---------------------------------------------
(Please Print)

Name of Individual Broker or
Financial Consultant:
------------------------------------

Identification Number (if known):
---------------------------
Address:
--------------------------------------------------

------------------------------------------------------------
(Include Zip Code)

-----------------------------------------------------------------

SIGN HERE

------------------------------ ------------------------------
Signature(s)

----------------------------- ------------------------------

----------------------------- ------------------------------
Please print name(s) and
address(es) here

Dated:
------------------

Exhibit 99(d)

NOTICE OF GUARANTEED DELIVERY

This form, or a form substantially equivalent to this form,
must be used to accept the Offer (as defined below) if (i)
certificates for shares of $[ ] Depositary Shares, Series [
], each representing 1/4 share of $[ ] Cumulative Preferred
Stock (the "Depositary Shares") of Texas Utilities Electric
Company (the "Company") cannot be delivered to the Exchange Agent
by the Expiration Date (as defined in the Prospectus of the
Company and TU Electric Capital [ ] dated November , 1995
(the "Prospectus")), (ii) the procedure for book-entry transfer
of Depositary Shares (as set forth in the Prospectus) cannot be
completed by the Expiration Date or (iii) the Letter of
Transmittal (or a facsimile thereof) and all other required
documents cannot be delivered to the Exchange Agent prior to the
Expiration Date. This form, properly completed and duly executed,
may be delivered by hand or facsimile transmission or mail to the
Exchange Agent. See the Prospectus.

To: CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C., as Exchange Agent

By Overnight Courier:

Chemical Mellon Shareholder Services, L.L.C.
Reorganization Department
85 Challenger Road
Ridgefield Park, New Jersey 07660

By Hand:

Chemical Mellon Shareholder Services, L.L.C.
Reorganization Department
120 Broadway
13th Floor
New York, New York 10271

By Mail:
(registered or certified mail recommended)

Chemical Mellon Shareholder Services, L.L.C.
Reorganization Department
P.O. Box 817
Midtown Station
New York, New York 10018

By Facsimile Transmission:
(For Eligible Institutions Only)

(201) 296-4293

Confirm Receipt of Notice of Guaranteed Delivery

By Telephone:

(201) 296-4209

Delivery of this Notice of Guaranteed Delivery to an address
other than as set forth above or transmission of instructions via
facsimile transmission to a number other than as set forth above
will not constitute a valid delivery.

<PAGE>

Ladies and Gentlemen:

The undersigned hereby tenders to Texas Utilities Electric
Company, upon the terms and conditions set forth in the
Prospectus and the related Letter of Transmittal (which
constitute the "Offer"), receipt of which is hereby acknowledged,
the number of Depositary Shares set forth below, pursuant to the
guaranteed delivery procedure set forth in the Prospectus.

SIGN HERE

Number of Depositary
Shares tendered: X
------------- ------------------------------

X
----------------------------- ------------------------------
(Signature(s))

Certificate Nos. (if available) ------------------------------
(Name(s)) (Please Print)

----------------------------- ------------------------------
(Address)

----------------------------- ------------------------------
(Zip Code)

------------------------------
(Area Code and Telephone No.)

If Depositary Shares will be tendered by
book-entry transfer:

Name of Tendering Institution:
---------------

---------------------------------------------

Check Box of Book-Entry Transfer Facility:

[ ] The Depositary Trust Company

[ ] Philadelphia Depositary Trust Company

[ ] Midwest Securities Trust Company

Account No.

---------------------------------------------

<PAGE>

-----------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(Not to be used for signature guarantee)

The undersigned, a firm that is a member of a registered
national securities exchange or the National Association of
Securities Dealers, Inc., or a commercial bank or trust company
having an office branch or agency in the United States,
guarantees (a) that the above named person(s) "own(s)" the
Depositary Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended, (b)
that such tender of Depositary Shares complies with Rule 14e-4
and (c) to deliver to the Exchange Agent either the Depositary
Shares tendered hereby, in proper form for transfer, or
confirmation of the book-entry transfer of the Depositary Shares
tendered hereby into the account of the Exchange Agent at The
Depository Trust Company, Midwest Securities Trust Company or
Philadelphia Depository Trust Company, in each case together
with a properly completed and duly executed Letter(s) of
Transmittal (or facsimile(s) thereof), with any required
signature guarantees (or an Agent's message (as defined in the
Prospectus)) and any other required documents within three New
York Stock Exchange trading days after the date of execution
of this Notice.

Name of Firm
-----------------------------------------------------

Authorized Signature
--------------------------------------------

Name
------------------------------------------------------------

Address
--------------------------------------------------------

Zip Code
-------------------------------------------------------

Area Code and Telephone No.
------------------------------------

Dated , 1995
-------------

-----------------------------------------------------------------
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM.
YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF
TRANSMITTAL.

Exhibit 99(e)

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.

Purpose of Form. -- A person who is required to file an
information return with the IRS must obtain your correct TIN to
report income paid to you, real estate transactions, mortgage
interest you paid, the acquisition or abandonment of secured
property, or contributions you made to an IRA. Use Form W-9 to
furnish your correct TIN to the requester (the person asking you
to furnish your TIN) and, when applicable, (1) to certify that
the TIN you are furnishing is correct (or that you are waiting
for a number to be issued), (2) to certify that you are not
subject to backup withholding, and (3) to claim exemption from
backup withholding if you are an exempt payee. Furnishing your
correct TIN and making the appropriate certifications will
prevent certain payments from being subject to backup
withholding.

Note: If a requester gives you a form other than a W-9 to
request your TIN, you must use the requester's form.

How to Obtain a TIN. -- If you do not have a TIN, apply for
one immediately. To apply, get Form SS-5, Application for a
Social Security Card (for individuals), from your local office of
the Social Security Administration, or Form SS-4, Application for
Employer Identification Number (for businesses and all other
entities), from your local IRS office.

To complete Form W-9 if you do not have a TIN, write
"Applied for" in the space for the TIN in Part I (or check box 2
of Substitute Form W-9), sign and date the form, and give it to
the requester. Generally, you must obtain a TIN and furnish it
to the requester by the time of payment. If the requester does
not receive your TIN by the time of payment, backup withholding,
if applicable, will begin and continue until you furnish your TIN
to the requester.

Note: Writing "Applied for" (or checking box 2 of the
Substitute Form W-9) on the form means that you have already
applied for a TIN OR that you intend to apply for one in the near
future.

As soon as you receive your TIN, complete another Form W-9,
include your TIN, sign and date the form, and give it to the
requester.

What Is Backup Withholding? -- Persons making certain
payments to you after 1992 are required to withhold and pay to
the IRS 31% of such payments under certain conditions. This is
called "backup withholding". Payments that could be subject to
backup withholding include interest, dividends, broker and barter
exchange transactions, rents, royalties, nonemployee
compensation, and certain payments from fishing boat operators,
but do not include real estate transactions.

If you give the requester your correct TIN, make the
appropriate certifications, and report all your taxable interest
and dividends on your tax return, your payments will not be
subject to backup withholding. Payments you receive will be
subject to backup withholding if:

1. You do not furnish your TIN to the requester, or

2. The IRS notifies the requester that you furnished
an incorrect TIN, or

3. You are notified by the IRS that you are subject to
backup withholding because you failed to report all your
interest and dividends on your tax return (for reportable
interest and dividends only), or

4. You do not certify to the requester that you are
not subject to backup withholding under 3 above (for
reportable interest and dividend accounts opened after 1983
only), or

5. You do not certify your TIN. This applies only to
reportable interest, dividend, broker, or barter exchange
accounts opened after 1983, or broker accounts considered
inactive in 1983.

Except as explained in 5 above, other reportable payments
are subject to backup withholding only if 1 or 2 above applies.
Certain payees and payments are exempt from backup withholding
and information reporting. See Payees and Payments Exempt From
Backup Withholding, below, and Example Payees and Payments under
Specific Instructions, below, if you are an exempt payee.

Payees and Payments Exempt From Backup Withholding. -- The
following is a list of payees exempt from backup withholding and
for which no information reporting is required. For interest and
dividends, all listed payees are exempt except item (9). For
broker transactions, payees listed in (1) through (13) and a
person registered under the Investment Advisers Act of 1940 who
regularly acts as a broker are exempt. Payments subject to
reporting under sections 6041 and 6041A are generally exempt from
backup withholding only if made to payees described in items (1)
through (7), except a corporation that provides medical and
health care services or bills and collects payments for such
services is not exempt from backup withholding or information
reporting. Only payees described in items (2) through (6) are
exempt from backup withholding for barter exchange transactions,
patronage dividends, and payments by certain fishing boat
operators.

(1) A corporation. (2) An organization exempt from tax under
section 501(a), or an IRA, or a custodial account under section
403(b)(7). (3) The United States or any of its agencies or
instrumentalities. (4) A state, the District of Columbia, a
possession of the United States, or any of their political
subdivisions or instrumentalities. (5) A foreign government or
any of its political subdivisions, agencies, or
instrumentalities. (6) An international organization or any of
its agencies or instrumentalities. (7) A foreign central bank of
issue. (8) A dealer in securities or commodities required to
register in the United States or a possession of the United
States. (9) A futures commission merchant registered with the
Commodity Futures Trading Commission. (10) A real estate
investment trust. (11) An entity registered at all times during
the tax year under the Investment Company Act of 1940. (12) A
common trust fund operated by a bank under section 584(a). (13) A
financial institution. (14) A middleman known in the investment
community as a nominee or listed in the most recent publication
of the American Society of Corporate Secretaries, Inc., Nominee
List. (15) A trust exempt from tax under section 664 or described
in section 4947.

Payments of dividend and patronage dividends generally not
subject to backup withholding include the following:

. Payments to nonresident aliens subject to withholding
under section 1441.

. Payments to partnerships not engaged in a trade or
business in the United States and that have at least
one nonresident partner.

. Payments of patronage dividends not paid in money.

. Payments made by certain foreign organizations.

Payments of interest generally not subject to backup withholding
include the following:

. Payments of interest on obligations issued by
individuals.

Note: You may be subject to backup withholding if this
interest is $600 or more and is paid in the course of the payer's
trade or business and you have not provided your correct TIN to
the payer.

. Payments of tax-exempt interest (including exempt-
interest dividends under section 852).

. Payments described in section 6049(b)(5) to
nonresident aliens.

. Payments on tax-free covenant bonds under section
1451.

. Payments made by certain foreign organizations.

. Mortgage interest paid by you.

Payments that are not subject to information reporting are
also not subject to backup withholding. For details, see
sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A, and
6050N, and their regulations.

PENALTIES.

Failure to Furnish TIN. -- If you fail to furnish your
correct TIN to a requester, you will be subject to a penalty of
$50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.

Civil Penalty for False Information With Respect to
Withholding. -- If you make a false statement with no reasonable
basis that results in no backup withholding, you are subject to a
$500 penalty.

Criminal Penalty for Falsifying Information. -- Willfully
falsifying certifications or affirmations may subject you to
criminal penalties including fines and/or imprisonment.

Misuse of TINs. -- If the requester discloses or uses TINs
in violation of Federal law, the requester may be subject to civil
and criminal penalties.

SPECIFIC INSTRUCTIONS.

Name. -- If you are an individual, you must generally provide
the name shown on your Social Security card. However, if you
have changed your last name, for instance, due to marriage,
without informing the Social Security Administration of the name
change, please enter your first name, the last name shown on your
Social Security card, and your new last name.

If you are a sole proprietor, you must furnish your
individual name and either your SSN or EIN. You may also enter
your business name or "doing business as" name on the business
name line. Enter your name(s) as shown on your Social Security
card and/or as it was used to apply for your EIN on Form SS-4.

SIGNING THE CERTIFICATION.

1. Interest, Dividend, Broker and Barter Exchange Accounts
Opened Before 1984 and Broker Accounts Considered Active During
1983. You are required to furnish your correct TIN, but you are
not required to sign the certification.

2. Interest, Dividend, Broker and Barter Exchange Accounts
Opened Before 1984 and Broker Accounts Considered Inactive During
1983. You must sign the certification or backup withholding will
apply. If you are subject to backup withholding and you are
merely providing your correct TIN to the requester, you must
cross out item 2 in the certification before signing the form.

3. Real Estate Transactions. You must sign the
certification. You may cross out item 2 of the certification.

4. Other Payments. You are required to furnish your correct
TIN, but you are not required to sign the certification unless
you have been notified of an incorrect TIN. Other payments
include payments made in the course of the requester's trade or
business for rents, royalties, goods (other than bills for
merchandise), medical and health care services, payments to a
nonemployee for services (including attorney and accounting
fees), and payments to certain fishing boat crew members.

5. Mortgage Interest Paid by You, Acquisition or Abandonment
of Secured Property, or IRA Contributions. You are required to
furnish your correct TIN, but you are not required to sign the
certification.

6. Exempt Payees and Payments. If you are exempt form
backup withholding, you should complete this form to avoid
possible erroneous backup withholding. Enter your correct TIN in
Part I, write "EXEMPT" in the block in Part II, and sign and date
the form. If you are a nonresident alien or foreign entity not
subject to backup withholding, give the requester a complete Form
W-8, Certificate of Foreign Status.

7. TIN "Applied for." Follow the instructions under How To
Obtain a TIN on page 1, and sign and date this form.

Signature. -- For a joint account, only the person whose TIN
is shown in Part I should sign.

Privacy Act Notice. -- Section 6109 requires you to furnish
your correct TIN to persons who must file information returns
with the IRS to report interest, dividends, and certain other
income paid to you, mortgage interest you paid, the acquisition
or abandonment of secured property, or contributions you made to
an IRA. The IRS uses the numbers for identification purposes and
to help verify the accuracy of your tax return. You must provide
your TIN whether or not you are required to file a tax return.
Payers must generally withhold 31% of taxable interest, dividend,
and certain other payments to a payee who does not furnish a TIN
to a payer. Certain penalties may also apply.

WHAT NAME AND NUMBER TO GIVE THE REQUESTER.

For this type of account: Give name and SSN of:

1. Individual. . . . . . . . . . . The individual

2. Two or more individuals
(joint account) . . . . . . . . The actual owner of the
account or, if combined
funds, the first
individual on the
account(1)

-----------------
(1) List first and circle the name of the person whose
number you furnish.

<PAGE>

3. Custodian account of a minor
(Uniform Gift to Minors Act) . The minor(2)

4. a. The usual revocable savings
trust (grantor is also a
trustee) . . . . . . . . . . The grantor-trustee(1)

b. So-called trust account that
is not a legal or valid trust
under state law . . . . . . The actual owner(1)

5. Sole proprietorship . . . . . . The owner(3)

For this type of account: Give name and EIN of:

6. Sole proprietorship . . . . . . The owner(3)

7. A valid trust, estate, or
pension trust . . . . . . . . . Legal entity(4)

8. Corporate . . . . . . . . . . . The corporation

9. Association, club, religious,
charitable, educational, or other
tax-exempt organization . . . . The organization

10. Partnership . . . . . . . . . . The partnership

11. A broker or registered
nominee . . . . . . . . . . . . The broker or nominee

12. Account with the Department of
Agriculture in the name of a
public entity (such as a state
or local government, school
district or prison) that receives
agriculture program payments . . The public entity

-------------------
(2) Circle the minor's name and furnish the minor's SSN.

(3) Show your individual name. You may also enter your
business name. You may use your SSN or EIN.

(4) List first and circle the name of the legal trust, estate,
or pension trust. (Do not furnish the TIN of the personal
representative or trustee unless the legal entity itself
is not designated in the account title.

Note: If no name is circled when there is more than one name, the
number will be considered to be that of the first name listed.

Exhibit 99(f)

QUESTIONS AND ANSWERS
RELATING TO THE OFFER (THE "OFFER")
BY TEXAS UTILITIES ELECTRIC COMPANY ("COMPANY") TO EXCHANGE
EITHER ___% TRUST ORIGINATED PREFERRED SECURITIES (SM) ("TOPrS
(SM)") OF TU ELECTRIC CAPITAL (THE "TRUST") AND AN ADDITIONAL
CASH COMPONENT, OR CASH ONLY, FOR ANY AND ALL OF ITS OUTSTANDING
$____ DEPOSITARY SHARES, SERIES ___, EACH REPRESENTING 1/4 SHARE
OF $______ CUMULATIVE PREFERRED STOCK

This information should be read only in conjunction with,
and is subject in all material respects to the Prospectus dated
November __, 1995 (the "Prospectus") and the Letter of
Transmittal (the "Letter of Transmittal") and related documents
delivered herewith which together constitute the Offer Materials.
Please refer to the Prospectus for the definitions of the
capitalized terms used herein which are not otherwise defined.

See "Risk Factors: in the Prospectus for certain additional
information relevant to the Offer and an investment in the TOPrS,
including the period and circumstances during and under which
payment of distributions on the TOPrS may be deferred and certain
related federal income tax consequences. Holders of Depositary
Shares should carefully consider the risk factors set forth in
the Prospectus.

Q: WHAT ARE THE TERMS OF THE OFFER?
A: The Company will exchange each of the outstanding $_____
Depositary Shares ("Depositary Shares") issued by the
Company for the following consideration: At the Holder's
option, either ____% TOPrS with a liquidation preference of
$25.00 plus a cash component of $___ OR cash only in the
amount of $___.

Q: WHAT ARE TOPrS?
A: TOPrS represent preferred interests in TU Electric Capital's
assets, which consist solely of ___ % Junior Subordinated
Debentures due __________, 2030 issued by the Company.
TOPrS pay quarterly distributions corresponding to the
interest rate and the payment dates for the Junior
Subordinated Debentures. See "Description of the Preferred
Securities" in the Prospectus.

Q: WHAT IS THE PURPOSE OF THE OFFER?
A: The principal purpose of the Offer is to refinance all or a
portion of the Depositary Shares and to achieve certain tax
efficiencies for the Company. The Company expects to
finance cash purchases of Depositary Shares pursuant to the
Offer with the proceeds of an offer of securities similar to
the TOPrS in a separate transaction. The refinancing will
permit the Company to deduct interest payable on the Junior
Subordinated Debentures (and any similar debt issued in
connection with the aforementioned financing) for United
States federal income tax purposes. Dividends payable on
the Depositary Shares are not tax deductible to the Company.

Q: WILL THE TOPrS BE LISTED ON THE NEW YORK STOCK EXCHANGE?
A: The Company will apply to list the TOPrS on the New York
Stock Exchange.

Q: ARE THE TOPrS RATED?
A: As of the date of the Prospectus, the TOPrS have been rated
by Moody's and S&P's and have the same ratings as the
Depositary Shares.

Q: HOW ARE THE TOPrS GUARANTEED?
A: Distributions on the TOPrS and on liquidation or redemption
are guaranteed on a subordinated basis by the Company only
if, and to the extent that, interest payments have been made
on the Junior Subordinated Debentures. See DESCRIPTION OF
THE GUARANTEE in the Prospectus.

Q: ARE THE REDEMPTION PROVISIONS OF THE TOPrS DIFFERENT FROM
THE DEPOSITARY SHARES?
A: Yes. The Depositary Shares are redeemable at the option of
the Company on or after ______, and the Junior Subordinated
Debentures are redeemable at the option of the Company on or
after ______________. In addition, while the Depositary
Shares have no maturity date, the TOPrS will be redeemed
upon repayment of the Junior Subordinated Debentures at
their final maturity in 2030. See DESCRIPTION OF THE
PREFERRED SECURITIES in the Prospectus.

DIVIDEND MATTERS

Q: HOW DOES THE DISTRIBUTION RATE ON THE TOPrS COMPARE TO THE
DIVIDEND RATE ON THE DEPOSITARY SHARES?
A: The distribution rate on the TOPrS is ___% per annum, while
the dividend rate for the Depositary Shares is ___% per
annum.

Q: WILL DISTRIBUTIONS ON THE TOPrS BE PAID ON THE SAME SCHEDULE
AS DIVIDENDS ON THE DEPOSITARY SHARES?
A: No, there is a different payment schedule. Distributions on
the TOPrS will be paid on March 31, June 30, September 30
and December 31, while dividends are paid on the Depositary
Shares on January 1, April 1, July 1 and October 1.

Q: THE NEXT SCHEDULED DIVIDEND PAYMENT DATE ON THE DEPOSITARY
SHARES IS JANUARY 1, 1996 (SUBJECT TO DECLARATION BY THE
BOARD OF DIRECTORS). WILL THAT DIVIDEND BE PAID ON
DEPOSITARY SHARES THAT ARE EXCHANGED IN THE OFFER?
A: Holders of Depositary Shares accepted for exchange will be
entitled to receive cash equal to the accrued and unpaid
dividends on such shares after _________, 1995 to the
Closing Date for the Preferred Securities, in lieu of
dividends on their Depositary Shares accepted for exchange.
Such amount will be payable on the Closing Date.
Distributions on the TOPrS will begin to accrue on the
Closing Date.

Q: EXPLAIN THE 20 QUARTER DIVIDEND DEFERRAL PROVISION OF THE
TOPrS.
A: Quarterly interest payments on the Junior Subordinated
Debentures may be deferred at any time for one or more
periods of up to 20 consecutive quarters each, at the option
of the Company. In the case of any such deferral,
distributions on the TOPrS will be similarly deferred. See
"Distributions" under "Description of the Preferred
Securities" in the Prospectus.

Quarterly dividend payments on the Depositary Shares are
payable only if declared by the Company's Board of
Directors, and such dividends may be deferred indefinitely
subject to the rights of the Holders to elect a majority of
the Company's Board of Directors if four full quarterly
dividends are in default. To date, the Company has made
each quarterly dividend payment with respect to the
Depositary Shares on the scheduled dividend payment date.

Deferred TOPrS distributions continue to accrue and compound
quarterly at a rate equal to ____% per annum. During a
deferral, TU Electric Capital will continue to accrue
interest income (as original issue discount) in respect of
the Junior Subordinated Debentures which will be taxable to
beneficial owners of the TOPrS. As a result, beneficial
owners of the TOPrS during such a deferral will include
their pro rata share of the interest in gross income in
advance of the receipt of cash. Dividends on the Depositary
Shares accrue if dividends are suspended, but suspended
dividend payments are not compounded.

TAX ISSUES

Q: WILL THE EXCHANGE OF TOPrS FOR DEPOSITARY SHARES OR CASH
CONSTITUTE A TAXABLE EVENT?
A: Yes. The Company recommends that each holder read the
section entitled "Certain United States Federal Income Tax
Consequences" in the Prospectus and consult their own tax
advisor.

Q: WHAT IS THE TAX TREATMENT OF ANY CASH RECEIVED FROM THE
OFFER?
A: If a Holder exchanges Depositary Shares for TOPrS and cash,
gain or loss will be recognized in an amount equal to the
difference between the fair market value of the TOPrS plus
the cash and the Holder's tax basis in the Depositary
Shares. If a Holder exchanges Depositary Shares for cash
only, gain or loss will be recognized in an amount equal to
the difference between the cash received and the Holder's
tax basis in the Depositary Shares. Except in limited
circumstances, any gain recognized will be long-term capital
gain or loss if the Depositary Shares have been held for
more than one year.

Q: WHAT WILL BE THE INITIAL TAX BASIS FOR THE TOPrS?
A: The initial tax basis of TOPrS acquired in the Offer will be
equal to the fair market value of the TOPrS on the
Expiration Date of the Offer.

Q: HOW WILL DISTRIBUTIONS ON THE TOPrS BE REPORTED TO THE IRS?
A: Distributions on the TOPrS will be reported on Form 1099.

Q: CORPORATE HOLDERS CAN CLAIM THE DIVIDENDS-RECEIVED DEDUCTION
ON DIVIDENDS ON THE DEPOSITARY SHARES. ARE DISTRIBUTIONS ON
THE TOPrS ELIGIBLE FOR THAT DEDUCTION FOR CORPORATE HOLDERS?
A: No.

PROCEDURES FOR EXCHANGING
DEPOSITARY SHARES

Q: IF DEPOSITARY SHARES ARE REGISTERED IN MY NAME, HOW DO I
PARTICIPATE IN THE OFFER?
A: You should have received a package from D.F. King & Co.,
Inc. consisting of this Question and Answer sheet and:

. Prospectus dated November , 1995
. Letter of Transmittal bearing a pre-printed label with
your account name and address
. Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
. Notice of Guaranteed Delivery
. Return envelope addressed to Chemical Mellon
Shareholder Services, L.L.C.

If, after reviewing these materials carefully, you decide to
participate in the Offer, complete the applicable Letter of
Transmittal. The Letter of Transmittal provides the option
to exchange for either TOPrS and cash, or for cash only.
Send the completed and signed Letter of Transmittal with
your Depositary Receipts to Chemical Mellon Shareholder
Services, L.L.C., as Exchange Agent at any of the addresses
shown on the Letter of Transmittal. It is recommended that
you use insured or registered mail.

Holders of record may also contact their broker to exchange
their Depositary Shares on their behalf. And if you cannot
deliver your certificate(s) to the Exchange Agent before the
Expiration Date, then you must arrange for your broker to
guarantee delivery of your Depositary Shares.

Q: IF MY DEPOSITARY SHARES ARE HELD BY A BROKER OR BANK FOR MY
ACCOUNT, HOW DO I PARTICIPATE IN THE OFFER?
A: If your Depositary Shares are held by a broker or bank for
your account, you should have received a package from them
as holder of record containing, along with this Question and
Answer sheet, the following:

. Prospectus dated November , 1995
. Letter of Transmittal (for information only)
. Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
. Notice of Guaranteed Delivery
. Cover letter or notice with instructions from your
broker or bank.

If you decide to participate in the Offer, you must contact
your broker or bank to tender your Depositary Shares on your
behalf.

Q: ONCE I HAVE TENDERED MY DEPOSITARY SHARES, OR INSTRUCTED MY
BROKER OR BANK TO TENDER THEM ON MY BEHALF, MAY I WITHDRAW
THEM FROM THE OFFER?
A: Yes, tenders of Depositary Shares may be withdrawn at any
time prior to the Expiration Date and, unless accepted for
exchange by the Company, may be withdrawn at any time after
December ___, 1995. See "The Exchange Offer - Withdrawal of
Tenders" , in the Prospectus.

Q: WHEN DOES THE OFFER EXPIRE?
A: At 12:00 midnight, New York City time, on December , 1995,
unless extended by the Company. The Company may also amend
or terminate the Offer as described in the Prospectus.

For additional details,
or if you have any questions,
please call the Information Agent
D.F. King & Co., Inc.
1-800-697-6974

Exhibit 99(g)

This announcement is neither an offer to exchange or purchase nor
a solicitation of an offer to exchange or sell Depositary Shares.

The Offers are made solely by the applicable Prospectus dated
November , 1995 and the related Letters of Transmittal and are
not being made to (nor will exchanges be accepted from or on
behalf of) holders of Depositary Shares residing in any
jurisdiction in which the making of the Offers or the acceptance
thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction the securities laws of which
require the Offers to be made by a licensed broker or dealer, the
Offers shall be deemed made on behalf of the Company by one or
more brokers or dealers licensed under the laws of such
jurisdiction.

Notice of Offers to Exchange

Texas Utilities Electric Company

for

Any or All of its

$1.875 Depositary Shares $1.805 Depositary Shares $2.05 Depositary Shares
Series A Series B Each Representing
Each Representing Each Representing 1/4 share of
1/4 share of 1/4 share of $8.20 Cumulative
$7.50 Cumulative $7.22 Cumulative Preferred Stock
Preferred Stock Preferred Stock

Texas Utilities Electric Company, a Texas corporation (Company),
pursuant to the applicable Prospectus dated November , 1995,
is offering to exchange for any or all of its

I. _________ outstanding Depositary Shares, Series __, each
representing 1/4 share of $____ Cumulative Preferred Stock
($1.875 Depositary Shares), either ____% Trust Originated
Preferred Securities (TOPrS(SM)) issued by TU Electric
Capital __ with a liquidation preference of $25.00 plus a
cash component of $____, or cash only in the amount of
$_____ ($1.875 Depositary Share Offer).

II. _________ outstanding Depositary Shares, Series __, each
representing 1/4 share of $____ Cumulative Preferred Stock
($1.805 Depositary Shares), either ____% Trust Originated
Preferred Securities (TOPrS(SM)) issued by TU Electric
Capital __ with a liquidation preference of $25.00 plus a
cash component of $____, or cash only in the amount of
$_____ ($1.805 Depositary Share Offer).

III. _________ outstanding Depositary Shares, each representing
1/4 share of $____ Cumulative Preferred Stock ($2.05
Depositary Shares), either ____% Trust Originated Preferred
Securities (TOPrS(SM)) issued by TU Electric Capital __ with
a liquidation preference of $25.00, or cash in the
amount of $_____ ($2.05 Depositary Share Offer).

The $1.875 Depositary Share Offer, the $1.805 Depositary
Share Offer and the $2.05 Depositary Share Offer collectively
constitute the Offers. The $1.875 Depositary Shares, the
$1.805 Depositary Shares and the $2.05 Depositary Shares
collectively constitute the Depositary Shares.

Each Offer has its own Letter of Transmittal and Notice of
Guaranteed Delivery. EACH OFFER IS INDEPENDENT, AND THE OFFERS
ARE NOT CONDITIONED UPON ANY MINIMUM NUMBER OF DEPOSITARY SHARES
BEING TENDERED. The Offers are, however, subject to certain
other conditions. See THE EXCHANGE OFFER in the applicable
Prospectus.

----------------------------------------------------------------
EACH OFFER AND APPLICABLE WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON __________, 1995, UNLESS SUCH
OFFER IS EXTENDED.
----------------------------------------------------------------

NONE OF TU ELECTRIC CAPITAL __, THE COMPANY, OR THE COMPANY'S
BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO HOLDERS OF
DEPOSITARY SHARES AS TO WHETHER TO TENDER ALL OR ANY DEPOSITARY
SHARES IN THE EXCHANGE OFFERS OR TO ELECT TO RECEIVE AS
CONSIDERATION FOR ANY DEPOSITARY SHARES TENDERED EITHER PREFERRED
SECURITIES PLUS A CASH COMPONENT OR CASH ONLY. EACH SHAREHOLDER
MUST MAKE ITS OWN DECISION.

Holders of Depositary Shares accepted for exchange will be
entitled to receive on the Closing Date cash equal to the accrued
and unpaid dividends on such shares after _________, 1995 to the
Closing Date, in lieu of dividends on their Depositary Shares
accepted for exchange. Distributions on the TOPrS will begin to
accrue at their stated rate on the Closing Date.

The purpose of the Offer is to reduce the after-tax
financing costs of the Company through the replacement of
Depositary Shares with TOPrS and similar securities.

Upon the terms and subject to the conditions of the
Offer, the Company will accept for exchange any and all of the
Depositary Shares validly tendered and not withdrawn on or prior
to 12:00 midnight, New York City time, on _________, 1995, or if
the Offer is extended with respect to either series of
Depositary Shares by the Company, in its sole discretion, the
latest date and time to which the Offer with respect to
such series has been extended (with respect to each such series,
Expiration Date). The Company reserves the right to extend
the Offer with respect to any series of Depositary Shares
in its sole discretion at any time and from time to time
by giving oral or written notice to Chemical Mellon Shareholder
Services, L.L.C. and by making a public announcement thereof.
See THE EXCHANGE OFFER - "Procedures for Tendering" and
"Acceptance of Depositary Shares; Delivery of Preferred
Securities" in the applicable Prospectus.

Subject to the provisions under THE EXCHANGE OFFER -
"Withdrawal of Tenders," tenders of Depositary Shares of either
series pursuant to the Exchange Offer may be withdrawn at any
time on or prior to the Expiration Date with respect to such
series and, unless accepted for exchange by the Company, may be
withdrawn at any time after December ____, 1995. See THE
EXCHANGE OFFER - "Withdrawal of Tenders" in the applicable
Prospectus.

The applicable Prospectus and Letter of Transmittal contain
important information which should be read before any decision is
made with respect to the applicable Offer. Tenders may be made
only by a properly completed and executed Letter of Transmittal
or Agent's Message (as described in the applicable Prospectus).

The Company will pay to Soliciting Dealers (as defined in
the applicable Prospectus) designated by the registered or
beneficial owner, as appropriate, of the Depositary Shares, a
solicitation fee per Depositary Share validly tendered and
accepted for exchange pursuant to the Offer, subject to certain
conditions. Soliciting Dealers are not entitled to a
solicitation fee for Depositary Shares beneficially owned by such
Soliciting Dealer and tendered for exchange.

The information required to be disclosed by paragraph (d)(1)
of Rule 13e-4 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, is contained in the
applicable Prospectus and is incorporated herein by reference.

The applicable Prospectus and Letter of Transmittal are
first being sent to holders of Depositary Shares on November ,
1995 and are being furnished to brokers, dealers, banks and
similar persons whose name or whose nominees appear on the list
of holders of the Depositary Shares or, if applicable, who are
listed as participants in a clearing agency's security position
listing, for subsequent transmittal to beneficial owners of
Depositary Shares.

Any questions or requests for assistance should be directed
to the Information Agent at the address and telephone numbers set
forth below and the Dealer Managers. Requests for copies of the
applicable Prospectus or Letter of Transmittal or Notice of
Guaranteed Delivery should be directed to D. F. King & Co., Inc.,
the Information Agent, at 1-800-697-6974, and copies will be
forwarded promptly at the Company's expense. Holders of
Depositary Shares may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the
Offer.

The Information Agent for the Offer is:

D. F. KING & CO., INC.
77 Water Street
20th Floor
New York, New York 10005

Banks and Brokers Call Collect: (212) 269-5550

All Others Call Toll Free: 1-800-697-6974

The Dealer Managers for the Offer are:

MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
SMITH BARNEY INC.

November ____, 1995

(SM)"Trust Originated Preferred Securities" and "TOPrS"
are service marks of Merrill Lynch & Co.