REGISTRATION NOS. 333-_____, 333-_____-01 AND 333-______02
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------------
TEXAS UTILITIES ELECTRIC COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 75-1837355
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
TU ELECTRIC CAPITAL IV
TU ELECTRIC CAPITAL V
(EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
DELAWARE TO BE APPLIED FOR
(STATE OF INCORPORATION OR (I.R.S. EMPLOYER
ORGANIZATION) IDENTIFICATION NO.)
1601 BRYAN STREET
DALLAS, TEXAS 75201
(214) 812-4600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
ROBERT A. WOOLDRIDGE, ESQ.
WORSHAM, FORSYTHE
& WOOLDRIDGE, L.L.P.
1601 BRYAN STREET
DALLAS, TEXAS 75201
(214) 979-3000
JAMES H. SCOTT
TEXAS UTILITIES ELECTRIC COMPANY
SECRETARY
1601 BRYAN STREET
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
--------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS
SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE
FOLLOWING BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED
ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES
ACT OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND
OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE
FOLLOWING BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF
THE EARLIER EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES
ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION
STATEMENT FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE
434, PLEASE CHECK THE FOLLOWING BOX. [ ]
----------------------------------
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<PAGE>
Registration Nos. 333-_____, 333-_____-01 and 333-_____-02
=========================================================================
TITLE PROPOSED PROPOSED
0F EACH MAXIMUM MAXIMUM
CLASS OF AMOUNT OFFERING AGGREGATE
SECURITIES TO BE PRICE OFFERING AMOUNT OF
TO BE REGISTERED PER UNIT PRICE REGISTRAION
REGISTERED (1) (1) (1)(2) FEE
------------------------------------------------------------------------
TU Electric
Capital IV
and V
Securities ..... 20,000,000 $25.00 $500,000,000 $151,515.15
------------------------------------------------------------------------
Texas
Utilities
Electric
Company
Guarantee
with respect
to TU Electric
Capital IV and
V Securities
(3)(4) .........
------------------------------------------------------------------------
Texas
Utilities
Electric
Company
Junior
Subordinated
Debentures(5) ..
========================================================================
(1) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE
REGISTRATION FEE.
(2) EXCLUSIVE OF ACCRUED DISTRIBUTIONS, IF ANY.
(3) NO SEPARATE CONSIDERATION WILL BE RECEIVED FOR THE
TEXAS UTILITIES ELECTRIC COMPANY GUARANTEE OR THE
EXPENSE AGREEMENT.
(4) THIS REGISTRATION IS DEEMED TO INCLUDE THE RIGHTS OF
THE HOLDERS OF THE SECURITIES UNDER THE GUARANTEE, THE
TRUST AGREEMENT, THE JUNIOR SUBORDINATED DEBENTURES,
THE INDENTURE AND THE EXPENSE AGREEMENT, TOGETHER
CONSTITUTING THE BACKUP UNDERTAKINGS AS DESCRIBED IN
THE REGISTRATION STATEMENT.
(5) THE JUNIOR SUBORDINATED DEBENTURES WILL BE PURCHASED BY
TU ELECTRIC CAPITAL IV AND TU ELECTRIC CAPITAL V WITH
THE PROCEEDS OF THE SALE OF THE SECURITIES. NO
SEPARATE CONSIDERATION WILL BE RECEIVED FOR THE JUNIOR
SUBORDINATED DEBENTURES.
----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS
EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE
AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
==========================================================================
<PAGE>
Information contained herein is subject to completion or
amendment. A Registration Statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the Registration Statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
SUBJECT TO COMPLETION, DATED , 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED _______, 1997
,000,000 PREFERRED SECURITIES
TU ELECTRIC CAPITAL IV
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES (QUIPSSM)*
(LIQUIDATION PREFERENCE $25.00 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED AS SET FORTH HEREIN BY
TEXAS UTILITIES ELECTRIC COMPANY
The % Cumulative Quarterly Income Preferred Securities
(Preferred Securities) offered hereby are being issued by and
represent undivided preferred beneficial interests in TU Electric
Capital IV (TU Electric Capital), a statutory business trust
created under the laws of the State of Delaware. Texas Utilities
Electric Company (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 certain
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 its trust
interests (including the Preferred Securities) and investing the
proceeds thereof in % Junior Subordinated Debentures, Series D
issued by the Company (Series D Debentures) in an aggregate
principal amount equal to the aggregate liquidation preference of
the Trust Securities maturing or, at the election of the
Company, on an earlier date not earlier than , 2017. 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 SECURITIES -- "Subordination
of Common Securities" in the accompanying Prospectus.
(cover continued on following page)
SEE RISK FACTORS, BEGINNING ON PAGE S-2, FOR CERTAIN
INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED
SECURITIES.
-----------------------------------
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.
----------------------------------
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING TU ELECTRIC
OFFERING PRICE COMMISSION(1) CAPITAL(2)(3)
-------------- ------------- -------------
Per Preferred
Security . . . $ (2) $
Total . . . . . . $ (2) $
-------------------
(1) TU Electric Capital and the Company have agreed to
indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities
Act of 1933, as amended. See UNDERWRITING.
(2) In view of the fact that the entire proceeds of the
sale of the Preferred Securities will be used to
purchase the Series D Debentures, the Underwriting
Agreement provides that the Company will pay to the
Underwriters, as compensation for their arranging the
investment therein of such proceeds, $ per unit of
Preferred Securities (or $ in the aggregate).
See UNDERWRITING.
(3) Expenses of the offering, which are payable by the
Company, are estimated to be $ .
The Preferred Securities offered hereby are offered
severally by the Underwriters, as specified herein, and subject
to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that
delivery of the Preferred Securities will be made only in
book-entry form through the facilities of DTC on or about
1997.
------------------------
*QUIPS is a service mark of Goldman, Sachs & Co.
GOLDMAN, SACHS & C0.
---------------
The date of this Prospectus Supplement is , 1997.
<PAGE>
(cover continued)
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 March 31, 1997, at the per annum rate of % of the
liquidation preference thereof. Interest on the Series D
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 Series D 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 Series D
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
per annum rate of % (to the extent permitted by applicable
law), compounded quarterly. See DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES -- "Option to Extend Interest Payment
Period" in the Prospectus and CERTAIN TERMS OF THE PREFERRED
SECURITIES -- "Distributions" and CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES -- "Original Issue Discount" herein.
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 Series D
Debentures or make any guarantee payment with respect to the
foregoing. Any Extension Period with respect to payment of
interest on the Series D 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. 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 CERTAIN TERMS 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 pursuant to a
Guarantee. See DESCRIPTION OF THE GUARANTEES in the Prospectus.
If the Company fails to make interest payments on the Series D
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, a Holder of
Preferred Securities could institute a legal proceeding directly
against the Company to enforce payment to such Holder of the
principal of or interest on Series D Debentures having a
principal amount equal to the aggregate liquidation amount of the
Preferred Securities held by such Holder. 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 has agreed in an Agreement as to Expenses and
Liabilities to provide funds to pay obligations of TU Electric
Capital to parties other than Holders of Trust Securities of TU
Electric Capital. The Series D Debentures and the Guarantee,
together with the obligations of the Company with respect to the
Preferred Securities under the Indenture, the Trust Agreement and
the Expense Agreement, constitute a full and unconditional
guarantee of the Preferred Securities by the Company.
The Company has organized trusts similar to TU Electric
Capital for the purpose of issuing securities similar to the
Preferred Securities and may organize other trusts in the future.
Debt Securities of the Company that are pari passu with the
Series D Debentures were issued and may be issued in the future
in connection with the issuance of such securities. Any
extension period with respect to any such junior subordinated
debentures of the Company will apply to the Series D Debentures,
any other Debt Securities, any similar securities, the Preferred
Securities and any securities substantially the same as the
Preferred Securities.
The Preferred Securities are subject to mandatory redemption
upon repayment of the Series D Debentures at maturity or upon
their earlier redemption. See DESCRIPTION OF THE PREFERRED
SECURITIES -- "Redemption Procedures" in the Prospectus. The
Company will have the option at any time on or after ,
, upon not less than 45 days' notice, to redeem the Series D
Debentures, in whole or in part. The Company also will have the
right at any time to cause the termination of TU Electric Capital
and, in connection therewith, after satisfaction of creditors of
TU Electric Capital, if any, to distribute Series D Debentures to
the Holders of Preferred Securities or, upon the occurrence of a
Tax Event (as defined herein), to redeem, in whole but not in
part, the Series D 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 Series D
-2-
<PAGE>
Debentures to be redeemed at a redemption price of 100% of such
liquidation amount (Redemption Price), plus accrued and unpaid
distributions, including 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. The Preferred Securities will represent
97% of the Trust Securities and the Common Securities will
represent 3% of the Trust Securities. See DESCRIPTION OF THE
JUNIOR SUBORDINATED DEBENTURES -- "Optional Redemption" in the
Prospectus.
The Series D Debentures are subordinated and junior in right
of payment to all Senior Indebtedness (as defined herein) of the
Company. As of September 30, 1996, the Company had approximately
$7.0 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 Prospectus.
In the event of the liquidation of TU Electric Capital, the
Holders of the Trust Securities will be entitled to receive
Series D Debentures in an aggregate principal amount of $25.00
for each Preferred Security or, in certain circumstances, a
liquidation preference of $25.00 for each Preferred 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" in the Prospectus.
Application will be made to list the Preferred Securities on
the New York Stock Exchange.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-3-
<PAGE>
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE INFORMATION CONTAINED IN THE PROSPECTUS; AND
TO THE EXTENT IT IS INCONSISTENT THEREWITH, IT REPLACES SUCH
INFORMATION. EACH OF THE CAPITALIZED TERMS USED IN THIS
PROSPECTUS SUPPLEMENT AND NOT OTHERWISE DEFINED HEREIN HAS THE
MEANING GIVEN SUCH TERM IN THE PROSPECTUS.
RISK FACTORS
Prospective purchasers of Preferred Securities should
carefully consider the following risk factors with respect to the
Preferred Securities:
DEPENDENCE OF TU ELECTRIC CAPITAL ON THE COMPANY FOR FUNDS;
SUBORDINATION OF GUARANTEE AND SERIES D 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 Series D 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 Series D Debentures are subordinated and junior in right of
payment to Senior Indebtedness of the Company. As of September
30, 1996, Senior Indebtedness of the Company aggregated
approximately $7.0 billion. There are no terms of the Preferred
Securities, the Series D Debentures or the Guarantee that limit
the Company's ability to incur additional indebtedness, including
indebtedness that would rank senior to the Series D Debentures
and the Guarantee. See DESCRIPTION OF THE GUARANTEE -- "Status of
the Guarantee" and DESCRIPTION OF THE JUNIOR SUBORDINATED
DEBENTURES -- "Subordination" in the Prospectus.
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 Series D
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 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 Series
D 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 Series D
Debentures. Any extension period with respect to payment of
interest on the Series D 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
Series D Debentures is unlikely to occur. See CERTAIN TERMS OF
THE PREFERRED SECURITIES -- "Distributions" herein and DESCRIPTION
OF THE JUNIOR SUBORDINATED DEBENTURES -- "Option to Extend
Interest Payment Period in the Prospectus."
ADVERSE TAX CONSEQUENCES OF EXTENSION OF INTEREST PAYMENT PERIOD;
OID
Should the Company exercise its right to extend the interest
payment period for the Series D Debentures, each holder of
Preferred Securities would be required to accrue income as
original issue discount (OID) in respect of the deferred
interest. As a result, a Holder of Preferred Securities would be
required to continue to include in gross income an amount of OID
in respect of the distributions accruing on the Preferred
S-2
<PAGE>
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 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."
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 Series D 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, plus 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 the distribution
of Series D Debentures to the Holders in exchange for Preferred
Securities as provided in the Trust Agreement or upon a
redemption of all of the Preferred Securities upon maturity or
redemption of the Series D Debentures as provided in the Trust
Agreement), 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 Series D Debentures, TU Electric
Capital would lack available funds for the payment of
distributions or amounts payable on redemption of 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. In such event, a Holder of Preferred
Securities could institute a legal proceeding directly against
the Company to enforce payment to such Holder of the principal of
or interest on Series D Debentures having a principal amount
equal to the aggregate liquidation amount of the Preferred
Securities held by such Holder. See DESCRIPTION OF THE GUARANTEE
-- "Status of the Guarantee" and DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES -- "Subordination" in the Prospectus. 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.
The Preferred Securities are subject to mandatory redemption
upon repayment of the Series D 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 , upon not less than 45
days' notice, to redeem the Series D Debentures, in whole or in
part.
ADVERSE EFFECT OF POSSIBLE LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996
(Bill), the revenue portion of President Clinton's budget
proposal, was released. The Bill would, among other things,
generally treat as equity an instrument, issued by a corporation,
that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer
or, where the instrument is issued to a related party (other than
a corporation), where the holder or some other related party
issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet. The above described
provision was proposed to be effective generally for instruments
issued on or after December 7, 1995. If such provision were to
apply to the Series D Debentures, the Company would be unable to
deduct interest on the Series D Debentures. However, on March
29, 1996, the Chairmen of the Senate Finance and House Ways and
Means Committees issued a joint statement to the effect that it
S-3
<PAGE>
was their intention that the effective date of the President's
legislative proposals, if adopted, would be no earlier than the
date of the appropriate Congressional action. The 104th Congress
adjourned without any such action having been taken. There can
be no assurance, however, that future legislative proposals or
final legislation will not affect the ability of the Company to
deduct interest on the Junior Subordinated Debentures. If
legislation were enacted that limited, in whole or in part, the
deductibility by the Company of interest on the Series D
Debentures for United Stated federal income tax purposes, such
enactment could give rise to a Tax Event. A Tax Event would
permit the Company to cause a redemption of the Preferred
Securities, as described more fully under CERTAIN TERMS OF THE
PREFERRED SECURITIES -- "Distribution or Tax Event Redemption"
herein.
TAX EVENT REDEMPTION; POTENTIAL ADVERSE EFFECT ON MARKET PRICE
Upon the occurrence of a Tax Event, the Company shall have the
right to redeem the Series D Debentures, in whole (but not in
part), and thereby cause a mandatory redemption of the Preferred
Securities and the Common Securities at the Redemption Price
within 90 days following the occurrence of such Tax Event.
DISTRIBUTION OF THE SERIES D DEBENTURES
At any time, the Company has the right to terminate TU
Electric Capital and, after satisfaction of liabilities to
creditors, if any, of TU Electric Capital as provided by
applicable law, cause Series D Debentures to be distributed to
the holders of the Preferred Securities in liquidation of TU
Electric Capital.
There can be no assurance as to the market prices for
Preferred Securities or Series D Debentures that may be
distributed in exchange for Preferred Securities if a liquidation
of TU Electric Capital were to occur. Accordingly, the Preferred
Securities that an investor may purchase, whether pursuant to the
offer made hereby or in the secondary market, or the Series D
Debentures that a holder of Preferred Securities may receive on
liquidation of TU Electric Capital, may trade at a discount to
the price that the investor paid to purchase the Preferred
Securities offered hereby. Because holders of Preferred
Securities may receive Series D Debentures if the Company
exercises its right to terminate TU Electric Capital, prospective
purchasers of Preferred Securities are also making an investment
decision with regard to the Series D Debentures and should
carefully review all the information regarding the Series D
Debentures contained herein. See CERTAIN TERMS OF THE PREFERRED
SECURITIES -- "Distribution or Tax Event Redemption" and CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
EARLIER STATED MATURITY OF SERIES D DEBENTURES
The Company will also have the right to shorten the maturity
of the Series D Debentures whether or not TU Electric Capital is
terminated and the Series D Debentures are distributed to Holders
of the Preferred Securities to a date no earlier than ,
2017.
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 series of securities on the NYSE.
Accordingly, no assurance can be given as to the liquidity of, or
the development and maintenance of trading markets for, the
Preferred Securities. See UNDERWRITING.
UNDERWRITER MARKET ACTIVITY; NO ASSURANCE AS TO ACTIVE MARKET
The Underwriters currently plan to make a market in the
Preferred Securities. However, there can be no assurance that
the Underwriters will engage in such activities or that any
active market in the Preferred Securities will develop or be
maintained.
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 Series D Debentures.
S-4
<PAGE>
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
Subject to the Company's right to extend payment as described
under CERTAIN TERMS 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 THE
PREFERRED SECURITIES -- "Voting Rights in the Prospectus."
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, the Delaware Trustee and one or more of the
Administrative Trustees of such trust and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on
, 1997. 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 Supplement and the Prospectus
form 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 Series D 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 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 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.
S-5
<PAGE>
SUMMARY FINANCIAL INFORMATION
OF TEXAS UTILITIES ELECTRIC COMPANY
(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, 1996, have been made.
TWELVE MONTHS ENDED
------------------------------
DECEMBER 31,
------------------------------
1991 1992 1993
---- ---- ----
Income statement data:
Operating Revenues. . . $4,891,522 $4,906,695 $5,409,156
Net Income
(Loss)(a) . . . . . . . (289,173) 821,123 476,526
Ratio of Earnings
to Fixed Charges
(a)(b) . . . . . . . . 0.34 2.48 2.00
Ratio of Earnings
to Fixed Charges
and Preferred
Dividends (a)(b) . . . 0.27 2.08 1.62
TWELVE MONTHS ENDED
-------------------
DECEMBER 31, SEPTEMBER 30,
------------------- 1996
1994 1995 (UNAUDITED)
---- ---- ---------
Income statement data:
Operating
Revenues . . . . . . $5,613,175 $5,560,462 $5,918,587
Net Income
(Loss)(a) . . . . . . 658,192 454,432 868,574
Ratio of Earnings
to Fixed Charges
(a)(b) . . . . . . . 2.45 2.02 3.07
Ratio of Earnings
to Fixed Charges
and Preferred
Dividends (a)(b) . . 2.03 1.77 2.76
ADJUSTED(C)
-------------------
OUTSTANDING
AT
SEPTEMBER
30, 1996 AMOUNT PERCENT
------------ ------ -------
Capitalization (Unaudited):
Long-term Debt . . . . . $ 6,355,266 $ 6,355,266 %
Preferred Stock
Not subject to mandatory
redemption . . . . . . . 464,427 464,427
Subject to mandatory 250,844 250,844
redemption . . . . . . . ----------- ----------- -----
Total Preferred Stock 715,271 715,271
Company Obligated
Mandatorily
Redeemable Preferred
Securities
of Trusts (d) . . . . . 381,259
Common Stock Equity . . . 6,152,234 6,152,234
----------- ----------- -----
Total Capitalization . $13,604,030 $ 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, 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. The
twelve-month period ended December 31, 1995 was affected by
the impairment of several nonperforming assets, including
the Company's partially completed Twin Oak and Forest Grove
lignite-fueled facilities, as well as several minor assets.
Such impairment, on an after-tax basis, amounted to $316
million. (See the 1995 10-K.)
(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
$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 the issuance of the Preferred Securities
by TU Electric Capital, the sole assets of which are Series
D Debentures which bear interest at an annual rate of %
and mature on or, at the election of the Company, on
an earlier date, not earlier than , 2017.
Adjusted amounts do not reflect any possible future sales
from time to time by the Company of up to an additional
$98,850,000 of Medium-Term Notes, $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.
S-6
<PAGE>
USE OF PROCEEDS
The proceeds to be received by TU Electric Capital from the
sale of the Preferred Securities will be used to purchase Series
D Debentures of the Company. The proceeds of such purchase will
be used by the Company for general corporate purposes, which may
include the acquisition of outstanding securities of the Company.
CERTAIN TERMS OF THE PREFERRED SECURITIES
GENERAL
The following summary of certain terms of the Preferred
Securities supplements and should be read together with the
description of the terms and provisions of the Securities set
forth under DESCRIPTION OF THE SECURITIES in the Prospectus, does
not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the Trust
Agreement, including the definitions therein of certain terms,
and by reference to 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 Supplement
and the Prospectus form a part. The Preferred Securities and the
Common Securities will be created pursuant to the terms of the
Trust Agreement. The Preferred Securities will 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.
DISTRIBUTIONS
The distributions payable on the Preferred Securities will be
fixed at a rate per annum of % of the stated liquidation
preference 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)).
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 March 31, 1997,
except as otherwise described below. Such distributions will
originally accrue from, and include, the date of initial issuance
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.
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 Series D Debentures to extend the
interest payment period from time to time on the Series D
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
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 Series D Debentures. Any Extension
Period with respect to payment of interest on the Series D
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 Series D 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" in the Prospectus.
REDEMPTION OF PREFERRED SECURITIES
The Series D Debentures will mature on , 20 , or,
at the election of the Company, on an earlier date not earlier
than , 2017; and the Company has the right to redeem the
Series D Debentures in whole or in part on or after
S-7
<PAGE>
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 Series D 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 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" in the
Prospectus.
DISTRIBUTION OR TAX EVENT REDEMPTION
If at any time, a Tax Event shall occur and be continuing, the
Company shall have the right to redeem the Series D Debentures in
whole (but not in part) and thereby cause a mandatory redemption
of the Preferred Securities and Common Securities in whole (but
not in part) at the Redemption Price within 90 days following the
occurrence of such Tax Event. Whether or not a Tax Event has
occurred, the Company has the right, at any time, to terminate TU
Electric Capital and, after satisfaction of liabilities to
creditors of TU Electric Capital, if any, as provided by
applicable law, cause the Series D Debentures to be distributed
to the holders of the Preferred Securities and Common Securities
in liquidation of TU Electric Capital. If the Company does not
elect either of the options described above, the Preferred
Securities will remain outstanding and, in the event a Tax Event
has occurred and is continuing, Additional Interest (as described
under DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES in the
Prospectus) will be payable on the Series D Debentures.
"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 time or manner in which such
amendment, clarification or change is introduced or made known,
which amendment, clarification, or change is effective, which
Administrative Action is taken or which judicial decision is
issued, in each case on or after the date of issuance of the
Preferred 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
the Series D Debentures, (ii) interest payable by the Company on
the Series D 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 Series D 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 Series D Debentures having
an aggregate principal amount equal to the stated liquidation
preference 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
Series D Debentures which may be distributed in exchange for
Preferred Securities if a termination and liquidation of TU
Electric Capital were to occur. Accordingly, the Series D
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 Series D Debentures are distributed to the Holders of
Preferred Securities upon the dissolution of the Company, the
Company will use its best efforts to list the Series D Debentures
on the NYSE or on such other exchange on which the Preferred
Securities are then listed.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company (DTC) will act as securities
depositary for the Preferred Securities. The Preferred
Securities will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or
more fully-registered global Preferred Securities certificates,
representing the total aggregate number of Preferred Securities,
will be issued and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the 1934 Act. DTC
holds securities that its participants (Participants) deposit
with DTC. DTC also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations
(Direct Participants). DTC is owned by a number of its Direct
Participants and by the NYSE, the American Stock Exchange, Inc.,
and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, such as securities
brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial
relationship with a Direct Participant either directly or
indirectly (Indirect Participants). The rules applicable to DTC
and its Direct Participants and Indirect Participants (together,
Participants) are on file with the Commission.
S-8
<PAGE>
Purchases of Preferred Securities within the DTC system must
be made by or through Direct Participants, which will receive a
credit for the Preferred Securities on DTC's records. The
ownership interest of each actual purchaser of Preferred
Securities (Beneficial Owner) is in turn to be recorded on the
Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial
Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of
their holdings, from the Participants through which the
Beneficial Owners purchased Preferred Securities. Transfers of
ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in
the Preferred Securities, except in the event that use of the
book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred
Securities deposited by Direct Participants with DTC are
registered in the name of DTC's nominee, Cede & Co. The deposit
of Preferred Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC
has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Preferred Securities are
credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants and by Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than
all of the Preferred Securities are being redeemed, DTC's
practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
Although voting with respect to the Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor
Cede & Co. will itself consent or vote with respect to Preferred
Securities. Under its usual procedures, DTC would mail an
Omnibus Proxy to TU Electric Capital as soon as possible after
the record date. The Omnibus Proxy assigns Cede & Co. consenting
or voting rights to those Direct Participants to whose accounts
the Preferred Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy). The
Company and TU Electric Capital believe that the arrangements
among DTC, Direct and Indirect Participants, and Beneficial
Owners will enable the Beneficial Owners to exercise rights
equivalent in substance to the rights that can be directly
exercised by a holder of a beneficial interest in TU Electric
Capital.
Distribution payments on the Preferred Securities will be made
to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payments on such payment
date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is
the case with securities held for the account of customers in
bearer form or registered in "street name," and such payments
will be the responsibility of such Participant and not of DTC, TU
Electric Capital or the Company, subject to any statutory or
regulatory requirements to the contrary that may be in effect
from time to time. Payment of distributions to DTC is the
responsibility of TU Electric Capital, disbursement of such
payments to Direct Participants is the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners is the
responsibility of Participants.
Except as provided herein, a Beneficial Owner will not be
entitled to receive physical delivery of Preferred Securities.
Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities
depositary with respect to the Preferred Securities at any time
by giving reasonable notice to TU Electric Capital. Under such
circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates are
required to be printed and delivered. Additionally, the
Administrative Trustees (with the consent of the Company) may
decide to discontinue use of the system of book-entry transfers
through DTC (or any successor depositary) with respect to the
Preferred Securities. In that event, certificates for the
Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-
entry system has been obtained from sources that the Company and
TU Electric Capital believe to be reliable, but neither the
Company nor TU Electric Capital takes responsibility for the
accuracy thereof.
LISTING SECURITIES ON THE NYSE
Application will be made to list the Preferred Securities on
the NYSE.
S-9
<PAGE>
CERTAIN TERMS OF THE SERIES D DEBENTURES
GENERAL
The following summary of certain terms of the Series D
Debentures supplements and should be read together with the
description of the terms and provisions of the Junior
Subordinated Debentures set forth under DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES in the Prospectus, does not purport to be
complete and is subject to, and qualified in its entirety by
reference to, the provisions of the Indenture, including the
definitions therein of certain terms, and by reference to the
Trust Indenture Act. Wherever particular sections or defined
terms of the Indenture are referred to, such sections or defined
terms are incorporated herein by reference. The Indenture has
been filed as an exhibit to the Registration Statement of which
this Prospectus Supplement and the Prospectus form a part.
Concurrently with the issuance of the Preferred Securities, TU
Electric Capital will invest the proceeds thereof and the
consideration paid by the Company for the Common Securities in
the Series D Debentures issued by the Company.
The Series D Debentures shall bear interest at the rate of %
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 March 31, 1997, to
the person in whose name each Series D Debenture is registered,
by the close of business on the Business Day 15 days preceding
such Interest Payment Date. The amounts payable as principal and
interest on the Series D Debentures are designed to be sufficient
to provide distributions payable on the Trust Securities.
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 Series D 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.
The entire outstanding principal amount of the Series D
Debentures will become due and payable, together with any accrued
and unpaid interest thereon, including Additional Interest, (as
defined under DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
in the Prospectus) if any, on , 20 provided that such
maturity date may be changed to an earlier date, not earlier than
, 2017, at any time at the election of the Company. In the
event the Company elects an earlier maturity date for the Series
D Debentures, it shall give notice to the Debenture Trustee, and
the Debenture Trustee shall give notice to the holders of the
Series D Debentures no less than 30 and no more than 60 days
prior to the effectiveness thereof.
If Series D Debentures are distributed to Holders of Preferred
Securities in a termination of TU Electric Capital, such Series D
Debentures will be issued in fully registered certificated form
in denominations of $25.00 and integral multiples thereof and may
be transferred or exchanged at the offices described below.
So long as it is not in default in the payment of interest on
the Junior Subordinated Debentures of any series, the Company
shall have the right under the Indenture to extend the interest
payment period from time to time on the Series D 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 Series D Debentures compounded quarterly, to the extent
permitted by applicable law). However, during any such Extension
Period, or at any time the Series D Debentures are outstanding if
the Company is in default under the Guarantee or with respect to
payments due on any Junior Subordinated Debentures, 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 Series D 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 Series D Debentures.
Any extension period with respect to payment of interest on the
Series D Debentures, other 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. 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.
REDEMPTION
On or after , the Company will have the right,
at any time and from time to time, to redeem the Series D
Debentures, in whole or in part, at a redemption price equal to
100% of the principal amount of the Series D Debentures being
redeemed, together with any accrued but unpaid interest,
including Additional Interest, if any, to the redemption date.
S-10
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If a Tax Event shall occur and be continuing, the Company
shall have the right to redeem the Series D Debentures in whole
or in part, at a redemption price plus accrued and unpaid
distributions equal to 100% of the principal amount of Series D
Debentures then outstanding plus any accrued and unpaid interest,
including Additional Interest, if any, to the redemption date.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal
income tax consequences of the ownership of Preferred Securities
as of the date hereof and represents the opinion of Reid & Priest
LLP, counsel to the Company, insofar as it relates to matters of
law or legal conclusions. Except where noted, it deals only with
Preferred Securities held as capital assets and does not deal
with special situations, such as those of dealers in securities
or currencies, financial institutions, life insurance companies,
persons holding Preferred Securities as a part of a hedging or
conversion transaction or a straddle, 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.
PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES, INCLUDING
PERSONS WHO ARE NOT UNITED STATES HOLDERS AND 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 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, tax 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
instruments establishing TU Electric Capital (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 Series
D Debentures. 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 SERIES D DEBENTURES
Based on the advice of Reid & Priest LLP, the Company believes
and intends to take the position that the Series D Debentures
will constitute indebtedness for United States federal income tax
purposes. No assurance can be given that such position will not
be challenged by the Internal Revenue Service or, if challenged,
that such a challenge will not be successful. By purchasing and
accepting Preferred Securities, each Holder covenants to treat
the Series D Debentures as indebtedness and the Preferred
Securities as evidence of an indirect beneficial ownership in the
Series D Debentures. The remainder of this discussion assumes
that the Series D Debentures will be classified as indebtedness
of the Company for United States federal income tax purposes.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996
(Bill), the revenue portion of President Clinton's budget
proposal, was released. The Bill would, among other things,
generally treat as equity an instrument, issued by a corporation,
that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer
or, where the instrument is issued to a related party (other than
a corporation), where the holder or some other related party
issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet. The above described
provision was proposed to be effective generally for instruments
issued on or after December 7, 1995. If such provision were to
apply to the Series D Debentures, the Company would be unable to
deduct interest on the Series D Debentures. However, on March
29, 1996, the Chairmen of the Senate Finance and House Ways and
Means Committees issued a joint statement to the effect that it
was their intention that the effective date of the President's
legislative proposals, if adopted, would be no earlier than the
date of the appropriate Congressional action. The 104th Congress
adjourned without any such action having been taken. There can
be no assurance, however, that future legislative proposals or
final legislation will not affect the ability of the Company to
deduct interest on the Series D Debentures. If legislation were
enacted that limited, in whole or in part, the deductibility by
the Company of interest on the Series D Debentures for United
Stated federal income tax purposes, such enactment could give
rise to a Tax Event. A Tax Event would permit the Company to
cause a redemption of the Preferred Securities, as described more
fully under DESCRIPTION OF THE PREFERRED SECURITIES --
"Distribution or Tax Event Redemption" herein.
S-11
<PAGE>
PAYMENTS OF INTEREST
Except as set forth below, stated interest on a Series D
Debenture will generally be taxable to a United States Holder as
ordinary income at the time it is paid or accrued in accordance
with the United States Holder's method of accounting for tax
purposes.
ORIGINAL ISSUE DISCOUNT
Under the income tax regulations that recently became
effective, the Company believes that the Series D Debentures will
not be treated as issued with OID. It should be noted that these
regulations have not yet been addressed in any rulings or other
interpretations by the IRS. Accordingly, it is possible that the
IRS could take a position contrary to the interpretation
described herein.
Under the Indenture, the Company has the right to defer the
payment of interest on the Series D Debentures at any time or
from time to time for a period not exceeding 20 consecutive
quarters with respect to each Extension Period, provided,
however, that no Extension Period may extend beyond the Stated
Maturity (as defined in the Indenture) of the Series D
Debentures. Should the Company exercise its rights to defer
payments of interest, the Series D Debentures would at that time
be treated as issued with OID for so long as they remained
outstanding. As a result, all United States Holders would, in
effect, be required to accrue interest income even if such United
States Holders are on a cash method of accounting. Consequently,
in the event that the payment of interest is deferred, a United
States Holder could be required to include OID in income on an
economic accrual basis, notwithstanding that the Company will not
make any interest payments during such period on the Series D
Debentures.
RECEIPT OF SERIES D DEBENTURES OR CASH UPON LIQUIDATION OF TU
ELECTRIC CAPITAL
As described under the caption DESCRIPTION OF THE PREFERRED
SECURITIES -- "Distribution or Tax Event Redemption," Series D
Debentures may be distributed to Holders of Preferred Securities
in exchange for the Preferred Securities upon 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 Series
D Debentures equal to such Holder's aggregate tax basis in its
Preferred Securities. A United States Holder's holding period
for the Series D 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," the Series D 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, such a redemption would, for
United States federal income tax purposes, constitute a taxable
disposition of the Preferred Securities, and a Holder would
recognize gain or loss as if such Holder had sold such redeemed
Preferred Securities. See "Sale, Exchange and Redemption of the
Preferred Securities."
SALE, EXCHANGE AND REDMEPTION OF THE PREFERRED SECURITIES
Upon the sale, exchange or redemption 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
redemption and such Holder's adjusted tax basis in the Preferred
Securities. A United States Holder's adjusted tax basis will, in
general, unless the Company has deferred payments of interest on
the Series D Debentures, be the issue price of the Preferred
Securities. 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 redemption, 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.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Subject to the qualification discussed below, income on the
Preferred Securities will be reported to holders on Forms 1099,
which should be mailed to such holders by January 31 following
each calendar year.
TU Electric Capital will report annually to Cede & Co., as
holder of record of the Preferred Securities, the interest income
paid or OID accrued during the year with respect to the Series D
Debentures. TU Electric Capital currently intends to report such
information on Form 1099 prior to January 31 following each
calendar year. The Underwriters have indicated to TU Electric
Capital that, to the extent that they hold Preferred Securities
as nominees for beneficial holders, they currently expect to
report the interest income paid or OID accrued during the
calendar year on such Preferred Securities to such beneficial
holders on Forms 1099 by January 31 following each calendar year.
Under current law, holders of Preferred Securities who hold as
nominees for beneficial holders will not have any obligation to
report information regarding the beneficial holders to TU
Electric Capital. TU Electric Capital, moreover, will not have
any obligation to report to beneficial holders who are not also
record holders. Thus, beneficial holders of Preferred Securities
who hold their Preferred Securities through the Underwriters will
receive Forms 1099 reflecting the income on their Preferred
Securities from such nominee holders rather than from TU Electric
Capital.
Payments made in respect of, and proceeds from the sale of,
Preferred Securities (or Series D Debentures distributed to
holders of Preferred Securities) may be subject to "backup"
withholding tax of 31% if the holder fails to comply with certain
identification requirements, or has previously failed to report
in full dividend and interest income, or does not otherwise
establish its entitlement to an exemption. Any withheld amounts
will be allowed as a refund or a credit against the holder's
United States federal income tax liability, provided the required
information is provided to the Internal Revenue Service.
S-12
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, the Company and TU Electric Capital have agreed that
TU Electric Capital will issue and sell to each of the
Underwriters named below, and each of the Underwriters, for whom
Goldman, Sachs & Co. are acting as Representatives, has severally
agreed to purchase from TU Electric Capital the respective number
of Preferred Securities set forth opposite its name below:
Number of Preferred
Underwriters Securities
------------ -------------------
Goldman, Sachs & Co. . . . . . . . .
. . . . . . . . . . . . .
. . . . . . . . . . . . .
. . . . . . . . . . . . .
. . . . . . . . . . . . .
. . . . . . . . . . . . .
============
Total . . . . . . . . . . . . . . . . . .
Subject to the terms and conditions of the Underwriting
Agreement, the Underwriters are committed to take and pay for all
the Preferred Securities offered hereby, if any are taken.
The Underwriters propose to offer the Preferred Securities in
part directly to the public at the initial public offering price
set forth on the cover page of this Prospectus Supplement, and in
part to certain securities dealers at such price less a
concession of $. per unit Preferred Security. The Underwriters
may allow, and such dealers may reallow, a concession not in
excess of $. per unit of Preferred Security to certain brokers
and dealers. After the Preferred Securities are released for
sale to the public, the offering price and other selling terms
may from time to time be varied by the Representatives.
In view of the fact that the proceeds of the sale of the
Preferred Securities will be used to purchase the Series D
Debentures, the Underwriting Agreement provides that the Company
will pay as compensation, for the Underwriters' arranging the
investment therein of such proceeds, an amount of $ per unit
of Preferred Securities for the accounts of the several
Underwriters.
Prior to this offering, there has been no public market for
the Preferred Securities. Application has been made to list the
Preferred Securities on the NYSE. In order to meet one of the
requirements for listing the Preferred Securities on the NYSE,
the Underwriters will undertake to sell lots of 100 or more
Preferred Securities to a minimum of 400 beneficial holders.
Trading of the Preferred Securities on the NYSE is expected to
commence within a fourteen-day period after the initial delivery
of the Preferred Securities. The Representatives have advised
the Company that they intend to make a market in the Preferred
Securities prior to commencement of trading on the NYSE, but are
not obligated to do so and may discontinue any such market making
at any time without notice.
The Company and TU Electric Capital have agreed to indemnify
the Underwriters against certain liabilities, including
liabilities under the 1933 Act.
Goldman, Sachs & Co. engage in transactions with, and from
time to time have performed services for, the Company in the
ordinary course of business.
EXPERTS
The financial statements and financial statement schedules
included in the 1995 10-K, incorporated herein by reference, have
been audited by Deloitte & Touche LLP, Independent Auditors, as
stated in their report included in such 1995 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.
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 Securities prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the 1933 Act.
S-13
<PAGE>
The statements made in the Company's 1995 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 December 31,
1996, members of the firm of Worsham, Forsythe & Wooldridge,
L.L.P. owned approximately 45,100 shares of the common stock of
Texas Utilities.
LEGALITY
Certain matters of Delaware law relating to the validity of
the Preferred Securities, the enforceability of the TU Electric
Capital 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. 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. 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.
S-14
<PAGE>
PROSPECTUS
$500,000,000
TU ELECTRIC CAPITAL IV
TU ELECTRIC CAPITAL V
SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED AS SET FORTH HEREIN BY
TEXAS UTILITIES ELECTRIC COMPANY
TU Electric Capital IV and TU Electric Capital V (together,
the Trusts and each, individually, a Trust), statutory business
trusts formed under the laws of the State of Delaware, may each
offer, from time to time, securities representing undivided
beneficial interests in the assets of the respective Trust
(Securities). The payment of periodic cash distributions
(Distributions) with respect to Securities of each Trust out of
moneys held by each Trust, and payment on liquidation, redemption
or otherwise with respect to such Securities, will be guaranteed
by Texas Utilities Electric Company (Company) to the extent
described herein (each, a Guarantee). See DESCRIPTION OF THE
GUARANTEES herein. The Company's obligations under the Guarantees
are subordinate and junior in right of payment to all other
liabilities of the Company. Each Trust exists for the sole
purpose of issuing the undivided common beneficial interests in
its assets (Common Securities) and the Securities with respect to
such Trust (together, the Trust Securities) and investing the
proceeds thereof in a series of Junior Subordinated Debentures
issued by the Company (Junior Subordinated Debentures) in an
aggregate principal amount equal to the aggregate liquidation
preference of Trust Securities of such Trust. The Junior
Subordinated Debentures purchased by a Trust may subsequently be
distributed pro rata to registered owners (Holders) of Securities
and Common Securities in connection with the dissolution of such
Trust upon the occurrence of certain events as may be described
in an accompanying Prospectus Supplement.
Specific terms of the Securities of any Trust in respect of
which this prospectus (Prospectus) is being delivered (Offered
Securities) and the terms of the related Junior Subordinated
Debentures held by such Trust will be set forth in a Prospectus
Supplement with respect to such Securities. The applicable
Prospectus Supplement will describe, without limitation and where
applicable or additional to the terms described in this
Prospectus, the following: the designation, number of securities,
liquidation amount per security, initial public offering price,
any listing on a securities exchange, distribution rate (or
method of calculation thereof), dates on which distributions
shall be payable and dates from which distributions shall accrue,
voting rights, terms for any conversion or exchange into other
securities, any redemption, exchange or sinking fund provisions,
any other rights, preferences, privileges, limitations or
restrictions relating to the Offered Securities and the terms
upon which the proceeds of the sale of the Offered Securities
shall be used to purchase a specific series of Junior
Subordinated Debentures of the Company.
The Securities may be offered in amounts, at prices and on
terms to be determined at the time of offering; provided,
however, that the aggregate initial public offering price of all
Securities shall not exceed $500,000,000. The Prospectus
Supplement relating to any series of Offered Securities will
contain information concerning certain United States federal
income tax considerations, if applicable to the Offered
Securities.
Each of the Trusts may sell the Securities directly, through
agents designated from time to time, or through underwriters or
dealers. See PLAN OF DISTRIBUTION. If any agents of the Company
and/or either Trust or any underwriters or dealers are involved
in the sale of the Securities, the names of such agents,
underwriters or dealers and any applicable commissions and
discounts will be set forth in any related Prospectus Supplement.
This Prospectus may not be used to consummate sales of
Securities unless accompanied by a Prospectus Supplement.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------
The date of this Prospectus is , 1997.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company 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, 1995 (1995 10-K).
2. Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996.
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 FOR SUCH COPIES SHOULD BE
DIRECTED TO JAMES H. SCOTT, 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, Suite 1300, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. In addition, the Commission
maintains a World Wide Web site (http://www.sec.gov) that
contains reports and other information filed by the Company.
Certain depositary shares representing shares of cumulative
preferred stock of the Company and preferred securities of Trusts
organized by the Company are listed on the New York Stock
Exchange (NYSE), where reports and other information concerning
the Company may be inspected.
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 either Trust are included
herein. The Company considers that such financial statements
would not be material to Holders of the Securities because the
Company is a reporting company under the Exchange Act and neither
Trust has any independent operations, but each exists for the
sole purpose of issuing the Trust Securities and holding Junior
Subordinated Debentures as trust assets.
Each Trust intends not to file separate reports under the 1934
Act but must apply for and be granted relief by the Commission to
avoid the requirement to file such reports.
-2-
<PAGE>
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
subsidiaries of Texas Utilities are 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, and Texas Utilities Australia Pty. Ltd., owner of
Eastern Energy Ltd., which is engaged in the purchase,
distribution and sale of electric energy in the eastern half of
the State of Victoria, Australia, to approximately 470,000
customers. Texas Utilities also has three 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 use at the
Company's generating stations; and Texas Utilities Services Inc.
provides financial, accounting, information technology,
personnel, procurement and other administrative services at cost.
In April 1996, Texas Utilities announced that it had entered into
a merger agreement with Dallas-based ENSERCH Corporation
(ENSERCH). Under the terms of the agreement, Lone Star Gas
Company and Lone Star Pipeline Company, the local distribution
and pipeline divisions of ENSERCH, and other businesses,
excluding Enserch Exploration Inc., a subsidiary of ENSERCH, will
be acquired by a new holding company, which will be named Texas
Utilities Company and will own all of the common stock of ENSERCH
and Texas Utilities.
The Company's service area covers the north central, eastern
and western parts of Texas, with a population estimated at
5,820,000 -- 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.
THE TRUSTS
Each Trust is a statutory business trust created under
Delaware law pursuant to (i) a trust agreement executed by the
Company, as depositor for such Trust, The Bank of New York as the
Property Trustee (Property Trustee) and The Bank of New York
(Delaware) as the Delaware Trustee (Delaware Trustee) and a
certain individual who is an employee of the Company or one of
its affiliates as Administrative Trustee (such person and all
other such persons so appointed with respect to each Trust,
hereinafter the Administrative Trustees) and (ii) the filing of a
certificate of trust with the Delaware Secretary of State of such
trust. Each such trust agreement will be amended and restated in
its entirety (as so amended and restated, a Trust Agreement)
substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Each Trust
Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939 (Trust Indenture Act). Each Trust exists
for the exclusive purposes of (i) issuing Trust Securities
representing undivided beneficial interests in the assets of such
Trust, (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 of
each Trust will be owned by the Company. The Common Securities
will rank pari passu, and payments will be made thereon pro rata,
with the Securities, except that upon the occurrence and
continuance of a default under a Trust Agreement, the rights of
the Holder of its 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 Securities of such Trust. The Company will acquire Common
Securities having an aggregate liquidation preference amount
equal to at least 3% of the total capital of each Trust. Each
Trust has a term of approximately 40 years, but may terminate
earlier as provided in the related Trust Agreement. Each Trust's
business and affairs will be conducted by the Administrative
Trustees of such Trust. 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 each Trust is
c/o Texas Utilities Electric Company, Energy Plaza, 1601 Bryan
Street, Dallas, Texas 75201.
The Company has organized trusts similar to the Trust for
the purpose of issuing securities similar to the Securities and
may organize other such trusts in the future.
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USE OF PROCEEDS
The proceeds to be received by the Trusts from the sale of the
Securities will be used to purchase Junior Subordinated
Debentures of the Company. The proceeds of such purchase will be
used by the Company for general corporate purposes, which may
include the acquisition of outstanding securities of the Company.
DESCRIPTION OF THE SECURITIES
Pursuant to the terms of the Trust Agreement for each Trust,
the Administrative Trustees on behalf of such Trust will issue
Securities and Common Securities. The Securities issued by
either Trust will represent undivided beneficial interests in the
assets of such Trust and will entitle the Holders thereof to a
preference over the Common Securities of such Trust in certain
circumstances with respect to distributions and amounts payable
on redemption or liquidation, as well as other benefits as
described in the related Trust Agreement. Each Trust Agreement
will be qualified as an indenture under the Trust Indenture Act,
and the forms of each have been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The following summaries of certain provisions of the Trust
Agreements do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, the provisions
of the related Trust Agreement, including the definitions therein
of certain terms, and by reference to the Trust Indenture Act.
Wherever particular sections or defined terms of a Trust
Agreement are referred to, such sections or defined terms are
incorporated herein by reference.
GENERAL
The terms of the Common Securities issued by a Trust will be
substantially identical to the terms of the Securities issued by
such trust and the Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Securities
except that, upon an event of default under the Trust Agreement,
the rights of the holders 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 Securities. Except in certain limited
circumstances, the Common Securities will also carry the right to
vote to appoint, remove or replace any of the Trustees of the
related Trust. All of the Common Securities of each Trust will be
owned by the Company.
Junior Subordinated Debentures in an aggregate principal
amount equal to the aggregate liquidation amount of the
Securities of such Trust will be held by the Property Trustee in
trust for the benefit of the Holders of the Trust Securities.
(Section 2.09). The aggregate of the following rights and
obligations with respect to the Securities of each Trust
constitute a full and unconditional guarantee by the Company of
payments due on the Securities of such Trust: the obligations of
the Company under the related Junior Subordinated Debentures to
pay principal and interest, the obligations of the Company under
the Junior Subordinated Debentures and pursuant to the Trust
Agreement to pay amounts equal to all expenses of each Trust, the
obligations of the Company under the related Guarantee and the
rights of the Holders of Securities to directly enforce the
Company's obligations with respect to the Junior Subordinated
Debentures. See DESCRIPTION OF THE JUNIOR SUBORDINATED
DEBENTURES -- "Additional Interest" and DESCRIPTION OF THE
GUARANTEES -- "Events of Default."
DISTRIBUTIONS
It is anticipated that the income of each Trust available for
distribution to the Holders of the Securities will be limited to
payments on the Junior Subordinated Debentures which such Trust
will purchase with the proceeds of the 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 held by a Trust, the Property
Trustee will not have funds available to pay distributions on the
Securities. The payment of distributions (if and to the extent
such Trust 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.
If so provided in the applicable Prospectus Supplement and
subject to the terms and conditions specified therein, the
Company has the right under the indenture dated as of December 1,
1995, between the Company and The Bank of New York, as trustee,
pursuant to which it will issue the Junior Subordinated
Debentures (Indenture) to extend the interest payment period from
time to time on the Junior Subordinated Debentures for one or
more periods (each an Extension Period), with the consequence
that distributions on the Securities would be deferred (but would
continue to accrue with interest payable on unpaid distributions
at a specified rate) by the relevant Trust during any such
Extension Period. In the event that the Company exercises this
right, during such period, or during any period in which the
Company is in default under a Guarantee or with respect to
payments on the Junior Subordinated Debentures, 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 securities issued under the Indenture
(Debt Securities) or on any similar securities will apply to all
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such securities and will also apply to distributions with respect
to the Securities and all other securities with terms
substantially the same as the 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
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 SECURITIES
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, Securities and Common Securities, each in 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 the
bankruptcy, termination or liquidation of a Trust, 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.
REDEMPTION PROCEDURES
The Company may not redeem fewer than all the Junior
Subordinated Debentures with respect to a Trust and a Trust may
not redeem fewer than all its outstanding Securities unless all
accrued and unpaid distributions have been paid on all Securities
for all distribution periods terminating on or prior to the date
of redemption or if a partial redemption of the Securities would
result in the delisting of the Securities by any national
securities exchange on which the Securities are then listed.
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 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 the relevant
Trust has funds available for the payment of such Redemption
Price plus accrued and unpaid distributions. (Section 4.02(c)).
See also "Subordination of Common Securities."
If a Trust gives a notice of redemption in respect of
Securities (which notice will be irrevocable), then, on or before
the Redemption Date, such Trust will irrevocably deposit with the
paying agent for the 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 Securities. Notwithstanding the
foregoing, distributions payable on or prior to the redemption
date for any Securities called for redemption shall be payable to
the Holders of such 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 Securities so
called for redemption will cease, except the right of the Holders
of such Securities to receive the Redemption Price plus accrued
and unpaid distributions, but without interest thereon, and such
Securities will cease to be outstanding. In the event that any
date fixed for redemption of 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 Securities called for
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redemption is improperly withheld or refused and not paid either
by such Trust or by the Company pursuant to the Guarantee
described herein under DESCRIPTION OF THE GUARANTEE,
distributions on such 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 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 Securities. The
particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Securities not previously called for
redemption, by such method as the Property Trustee shall deem
fair and appropriate and which may provide for the selection for
redemption of Securities in liquidation preference amounts equal
to the denominations in which they were issued or integral
multiples thereof. The Property Trustee shall promptly notify
the Security Registrar in writing of the Securities selected for
redemption and, in the case of any 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 Securities shall relate, in the case of any
Securities redeemed or to be redeemed only in part, to the
portion of the liquidation preference amount of 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 an Event of 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
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 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,
Securities then due and payable. (Section 4.03(a)).
In the case of any Event of 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 Securities have been cured,
waived or otherwise eliminated. Until any such default under
such Trust Agreement with respect to the Securities has been so
cured, waived or otherwise eliminated, the Property Trustee shall
act solely on behalf of the Holders of the Securities and not the
Holders of the Common Securities, and only Holders of Securities
will have the right to direct the Property Trustee to act on
their behalf. (Section 4.03(b)).
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to the relevant Trust Agreement, each Trust shall
terminate and shall be liquidated by the Property Trustee on the
first to occur of: (i) the expiration of the term of such Trust;
(ii) the bankruptcy, dissolution or liquidation of the Company;
(iii) the redemption of all of the Securities and (iv) at any
time, at the election of the Company (Sections 9.01 and 9.02).
If an early termination occurs as described in clause (ii)
above, a 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
liabilities of creditors, if any, and by distributing to each
Holder of Securities and Common Securities a Like Amount of
Junior Subordinated Debentures, unless such distribution is
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determined by the Property Trustee not to be practical, in which
event such Holders will be entitled to receive, out of the assets
of the relevant Trust 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 Securities,
the aggregate liquidation preference of the 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 a Trust
has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by
such Trust on the 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 Securities, except that if an Event of Default
has occurred and is continuing under the Trust Agreement, the
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 with respect to a Trust
(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
(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 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 Trustees 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 Trust by the Holders of Securities having at least 10%
of the total liquidation preference amount of the outstanding
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 Trust.
Within ninety Business Days after the occurrence of any
default, the Property Trustee shall transmit to the Holders of
Trust Securities and the Company notice of any such default
actually known to the Property Trustee, unless such default shall
have been cured or waived.
A Holder of Securities may directly institute a proceeding for
enforcement of payment to such Holder directly of the principal
of or interest on Junior Subordinated Debentures having a
principal amount equal to the aggregate liquidation preference
amount of the Securities of such Holder on or after the
respective due dates specified in the Junior Subordinated
Debentures. The Holders of the Securities would not be able to
exercise directly any other remedies available to the holder of
the Junior Subordinated Debentures unless the Property Trustee or
the Debenture Trustee, acting for the benefit of the Property
Trustee, fails to do so. See "Voting Rights" and DESCRIPTION OF
THE JUNIOR SUBORDINATED DEBENTURES -- "Enforcement of Certain
Rights by Holders of Securities."
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 Securities
having a majority of the liquidation preference of the
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).
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If an Event of Default described in clause (i) above has not
occurred with respect to a Trust solely by reason of the
requirement that time lapse or notice be given, and is
continuing, the Securities shall have a preference over the
Common Securities upon termination of such Trust as described
above. See "Liquidation Distribution upon Termination."
MERGER OR CONSOLIDATION OF THE PROPERTY TRUSTEE
OR THE DELAWARE TRUSTEE
Any entity into which the Property Trustee or the Delaware
Trustee with respect to a Trust 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
Except as described below and under "Amendments to the Trust
Agreement," and under DESCRIPTION OF THE GUARANTEES --
"Amendments and Assignment" and as otherwise required by law and
the Trust Agreement, the Holders of the Securities of either
Trust will have no voting rights. (Section 6.01(a)).
So long as any Junior Subordinated Debentures are held by the
Property Trustee with respect to a Trust, 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 813 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 Securities having at least 66 2/3% of the
liquidation preference amount of the outstanding 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
Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
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 Securities
may 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 Securities of any notice of default received
from the Debenture Trustee. In addition to obtaining the
foregoing approvals of the Holders of the 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 such Trust 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 Securities of a Trust may
be given at a separate meeting of Holders of Securities convened
for such purpose or pursuant to written consent. The
Administrative Trustees will cause a notice of any meeting at
which Holders of 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 Securities in the manner
set forth in the Trust Agreement. (Section 6.02).
No vote or consent of the Holders of Securities will be
required for a Trust to redeem and cancel Securities in
accordance with the Trust Agreement.
Notwithstanding that Holders of Securities are entitled to
vote or consent under any of the circumstances described above,
any of the Securities that are owned by the Company, any Trustee
or any affiliate of the Company or any Trustee, shall, for
purposes of such vote or consent, be treated as if they were not
outstanding.
Holders of the Securities will have no rights to appoint or
remove the Administrative Trustees of the related Trust, who may
be appointed, removed or replaced solely by the Company as the
Holder of the Common Securities.
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AMENDMENTS
Each Trust Agreement may be amended from time to time by the
related Trust (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 such Trust 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 such 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 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 a Trust Agreement
may be amended by the Trustees and the Company with (i) the
consent of Holders of the related Trust Securities representing
not less than a majority in liquidation preference of such 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 the related Trust to be classified
for federal income tax purposes as an association taxable as a
corporation or affect such Trust'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, a 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 a 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).
FORM, EXCHANGE, AND TRANSFER
At the option of the Holder, subject to the terms of the Trust
Agreement, Securities will be exchangeable for other Securities
of the same series in any authorized denomination and of like
tenor and aggregate liquidation preference.
Subject to the terms of the Trust Agreement, 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 Securities, but the Company may
require payment of a sum sufficient to cover any tax or other
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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 Securities.
Neither Trust will be required to (i) issue, register the
transfer of, or exchange any 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 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
Securities so selected for redemption, in whole or in part,
except the unredeemed portion of any such Securities being
redeemed in part.
REGISTRAR AND TRANSFER AGENT
Texas Utilities Services Inc. will act as registrar and
transfer agent for the Securities.
Registration of transfers of Securities of a Trust will be
effected without charge by or on behalf of such Trust, but upon
payment (with the giving of such indemnity as such Trust or the
Company may require) in respect of any tax or other governmental
charges which may be imposed in relation to it.
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 and acts as trustee under other indentures with
respect to Company obligations. The Company maintains deposit
accounts and credit and liquidity facilities 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
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 the related Trust 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 of a Trust will administer the day to day
operations of the Trust. See "Voting Rights."
The Administrative Trustees of a Trust are authorized and
directed to conduct the affairs of such Trust and to operate such
Trust so that the Trust 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 Securities.
Holders of the Securities have no preemptive or similar
rights.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the
Guarantees that will be executed and delivered by the Company for
the benefit of the Holders from time to time of Securities of
each Trust. Each Guarantee will be qualified as an indenture
under the Trust Indenture Act. The Bank of New York will act as
Guarantee Trustee under each 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. This
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 Guarantees, the forms of which are filed as
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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
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 Securities (except
to the extent paid by or on behalf of the related Trust), 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 Securities, to the extent not paid
by or on behalf of the related Trust (Guarantee Payments), will
be subject to the Guarantee (without duplication): (i) any
accrued and unpaid distributions required to be paid on the
Securities, to the extent such Trust has funds available
therefor, (ii) the Redemption Price, plus all accrued and unpaid
distributions, with respect to any Securities called for
redemption by such Trust, to the extent such Trust has funds
available therefor and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of such Trust (other than
in connection with the distribution of Debentures to the Holders
in exchange for Securities as provided in the respective Trust
Agreements or upon a redemption of all of the Securities upon
maturity or redemption of the Debentures as provided in the
respective Trust Agreements), the lesser of (a) the aggregate of
the liquidation preference and all accrued and unpaid
distributions on the Securities to the date of payment and (b)
the amount of assets of such Trust remaining available for
distribution to Holders of Securities in liquidation of such
Trust. 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 Securities or by causing such Trust to
pay such amounts to such Holders.
Each Guarantee will be a guarantee with respect to the
Securities issued by the related Trust from the time of issuance
of the Securities, but will not apply to (i) any payment of
distributions if and to the extent that such Trust does not have
funds available to make such payments, or (ii) collection of
payment. If the Company does not make interest payments on the
Junior Subordinated Debentures held by such Trust, the Trust will
not have funds available to pay distributions on the 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."
The Company will enter into agreements to provide funds to
each Trust as needed to pay obligations of such Trust to parties
other than Holders of Trust Securities (Expense Agreement). The
Junior Subordinated Debentures and the Guarantee, together with
the obligations of the Company with respect to the Securities
under the Indenture, the Trust Agreement, the Guarantee and the
Expense Agreement, constitute a full and unconditional guarantee
of the Securities by the Company. No single document standing
alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of
providing a full and unconditional guarantee by the Company of
the Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially
adversely affect the rights of Holders of Securities (in which
case no vote will be required), the terms of a Guarantee may be
changed only with the prior approval of the Holders of Securities
having at least 66 2/3% of the liquidation preference amount of
the outstanding related 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 Securities
then outstanding.
EVENTS OF DEFAULT
An event of default under a Guarantee will occur upon the
failure of the Company to perform any of its payment obligations
thereunder. The Holders of Securities having a majority of the
liquidation preference of the related 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 a Guarantee, any
Holder of Securities may enforce the Guarantee, institute a legal
proceeding directly against the Company to enforce the Guarantee
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Trustee's rights under such Guarantee without first instituting a
legal proceeding against the related Trust, 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 a Guarantee, has undertaken to
perform only such duties as are specifically set forth in the
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 a Guarantee at the
request of any Holder of Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby. See DESCRIPTION OF THE
SECURITIES -- "Concerning the Property Trustee."
TERMINATION OF THE GUARANTEES
Each 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 related Securities, the
distribution of Junior Subordinated Debentures to Holders of such
Securities in exchange for all of the Securities or full payment
of the amounts payable upon liquidation of the related Trust.
The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of
Securities must restore payment of any sums paid under the
Securities or the Guarantee.
STATUS OF THE GUARANTEES
Each 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. Each Trust Agreement provides
that each Holder of related Securities by acceptance thereof
agrees to the subordination provisions and other terms of the
Guarantee.
The Guarantees will constitute guarantees 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 each Trust will hold as
trust assets. The following description does not purport 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.
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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 issued to each Trust will constitute a separate series
under the Indenture.
GENERAL
The Junior Subordinated Debentures of each series will be
limited in aggregate principal amount to the sum of the aggregate
liquidation preference amount of the related 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 amounts payable as principal
and interest on the Junior Subordinated Debentures of each series
will be sufficient to provide for payment of distributions
payable on the related Trust Securities.
If Junior Subordinated Debentures are distributed to Holders
of Securities in a termination of a Trust, such Junior
Subordinated Debentures will be issued in fully registered
certificated form in the denominations and integral multiples
thereof in which such Securities have been issued 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
be made only upon surrender of such Junior Subordinated Debenture
to the Debenture Trustee.
OPTIONAL REDEMPTION
For so long as a Trust is the Holder of all the related
outstanding Junior Subordinated Debentures, the proceeds of any
optional redemption will be used by the Trust to redeem
Securities and Common Securities in accordance with their terms.
The Company may not redeem less than all the Junior Subordinated
Debentures of a series unless all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all
outstanding Junior Subordinated Debentures of such series for all
interest periods terminating on or prior to the date of
redemption.
Any optional redemption of Junior Subordinated Debentures of a
series shall be made upon not less than 30 nor more than 60 days'
notice from the Debenture Trustee to the Holders of such Junior
Subordinated Debentures, as provided in the Indenture. All
notices of redemption shall state the redemption date, the
redemption price plus accrued and unpaid interest, if less than
all the Junior Subordinated Debentures of a series 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 Debenture Trustee's receipt of the redemption
monies, the redemption price plus accrued and unpaid interest
will become due and payable upon each such Junior Subordinated
Debenture to be redeemed and that interest thereon will cease to
accrue on and after said date; and the place or places where such
Debentures are to be surrendered for payment of the redemption
price plus accrued and unpaid interest.
INTEREST
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and for
any period shorter than a full month, on the basis of the actual
number of days elapsed (Section 310). In the event that any date
on which interest is payable on a series of 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).
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OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as it is not in default in the payment of interest on
the Junior Subordinated Debentures of any series, the Company
shall have the right under the Indenture to extend the interest
payment period from time to time on the Junior Subordinated
Debentures of either series to a period not exceeding the period
provided in the Prospectus Supplement with respect to the related
Securities. 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 related Junior Subordinated
Debentures, 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 the permitted length of an Extension
Period for such series at any one time or extend beyond the
maturity date of such 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 related
Securities and all other securities with terms substantially the
same as such 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 the relevant Trust 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
such Trust to send notice of such election to the Holders of
Securities.
ADDITIONAL INTEREST
So long as any Securities of a Trust remain outstanding, if
such Trust 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 Junior
Subordinated Debentures 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 the Trust'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
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.
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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).
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 each
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, 1996 the
Company had approximately $7.0 billion principal amount of
indebtedness for borrowed money constituting Senior Indebtedness.
In addition, as of September 30, 1996, there were approximately
$79.9 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 an 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).
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
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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).
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 Debenture 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 Debenture
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;
(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).
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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).
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).
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF SECURITIES
If an Event of Default has occurred and is continuing, then
the Holders of Securities would rely on the enforcement by the
Property Trustee or the Debenture Trustee, acting for the benefit
of the Property Trustee, of its rights as a holder of the Junior
Subordinated Debentures against the Company. Notwithstanding the
foregoing, a Holder of Securities may enforce the Indenture
directly against the Company to the same extent as if such Holder
of Securities held a principal amount of Junior Subordinated
Debentures equal to the aggregate liquidation amount of the
Securities of such Holder (Section 610). See DESCRIPTION OF THE
SECURITIES -- "Events Of Default; Notice."
The Holders of the Securities would not be able to exercise
directly against the Company any rights other than those set
forth in the preceding paragraph available to the holders of the
Subordinated Debentures unless the Property Trustee or the
Debenture Trustee, acting for the benefit of the Property
Trustee, fails to do so for 60 days. In such event, to the
fullest extent permitted by law, the holders of a majority of the
aggregate liquidation amount of the outstanding Securities would
have the right to directly institute proceedings for enforcement
of such rights (Section 807).
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
-17-
<PAGE>
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
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
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 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
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<PAGE>
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. Notwithstanding the foregoing, so long as any of the
Securities with respect to a Trust remain outstanding, the
Debenture Trustee may not consent to a supplemental indenture
without the prior consent, obtained as provided in the Trust
Agreement pertaining to the Trust which issued such Securities,
of the holders of not less than a majority in aggregate
liquidation preference of all 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 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 the Indenture which has expressly been
included solely for the benefit of one or more particular series
of Debt Securities, or which modifies the rights of the Holders
of Debt Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights
under the Indenture of the Holders of Debt Securities of any
other series. Notwithstanding the foregoing, so long as any of
the Securities with respect to a Trust remain outstanding, the
Debenture Trustee may not consent to a supplemental indenture
without the prior consent, obtained as provided in the Trust
Agreement pertaining to the Trust which issued such Securities,
of the holders of not less than a majority in aggregate
liquidation preference of all 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 Securities then outstanding
which would be affected thereby, considered as one class (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
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
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<PAGE>
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
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 and in the same capacities
in respect of other trust subsidiaries of the Company. The Bank
of New York (Delaware) acts as the Delaware Trustee under the
Trust Agreement. See DESCRIPTION OF THE SECURITIES --
"Concerning the Property Trustee."
PLAN OF DISTRIBUTION
Either Trust may sell Securities in any of, or any combination
of, the following ways: (i) directly to purchasers, (ii) through
agents, (iii) through underwriters and (iv) through dealers.
Offers to purchase Offered Securities may be solicited
directly by a Trust or by agents designated thereby, from time to
time. Any such agent, who may be deemed to be an underwriter as
that term is defined in the Securities Act, involved in the offer
or sale of Offered Securities in respect of which this Prospectus
is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus
Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agency will be acting on a best efforts
basis for the period of its appointment (ordinarily five business
days or less). Agents, dealers and underwriters may be customers
of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale,
the Company will execute an underwriting agreement with such
underwriters at the time of sale to them and the names of the
underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement, which will be used by the
underwriters to make releases of the Offered Securities in
respect of which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of Offered Securities, the
related Trust will sell such Offered Securities to the dealer, as
principal. The dealer may then resell such Offered Securities to
the public at varying prices to be determined by such dealer at
the time of resale. The name of the dealer and the terms of the
transaction will be set forth in the related Prospectus
Supplement.
Agents, underwriters, and dealers may be entitled under the
relevant agreements to indemnification by the Company and/or the
related Trust, as the case may be, against certain liabilities,
including liabilities under the Securities Act.
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<PAGE>
The place and time of delivery for any Offered Securities will
be set forth in the related Prospectus Supplement.
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<PAGE>
=================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLE-
MENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT
OR AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
---------------------
PAGE
----
PROSPECTUS SUPPLEMENT
Risk Factors . . . . . . . . . . . . . . . . . . . . . . S-2
TU Electric Capital . . . . . . . . . . . . . . . . . . . S-5
Summary Financial Information
of Texas Utilities Electric Company . . . . . . . . . . S-6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . S-7
Certain Terms of the Preferred Securities . . . . . . . . S-7
Certain Terms of the Series D Debentures . . . . . . . . S-10
Certain United States Federal Income
Tax Consequences . . . . . . . . . . . . . . . . . . S-11
Underwriting . . . . . . . . . . . . . . . . . . . . . . S-13
Experts . . . . . . . . . . . . . . . . . . . . . . . . . S-13
Legality . . . . . . . . . . . . . . . . . . . . . . . . S-14
PROSPECTUS
Incorporation of Certain Documents by Reference . . . . . 2
Available Information . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . 3
The Trusts . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 4
Description of the Securities . . . . . . . . . . . . . . 4
Description of Guarantees . . . . . . . . . . . . . . . . 10
Description of the Junior Subordinated Debentures . . . . 12
Plan of Distribution . . . . . . . . . . . . . . . . . . 20
=================================================================
=================================================================
,000,000 PREFERRED SECURITIES
TU ELECTRIC CAPITAL IV
__% CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES
(QUIPSsm)
FULLY AND UNCONDITIONALLY GUARANTEED AS SET FORTH HEREIN BY
TEXAS UTILITIES
ELECTRIC COMPANY
------------------------------
PROSPECTUS
SUPPLEMENT
------------------------------
GOLDMAN, SACHS & CO.
REPRESENTATIVES OF THE UNDERWRITERS
=================================================================
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the
Company in connection with the issuance and distribution of the
securities to be registered.
Filing fee - Securities and Exchange
Commission . . . . . . . . . . . . . . . . $151,515.15
Fees of the Trustee . . . . . . . . . . . . . 5,000.00
Fees of Company's counsel
Worsham, Forsythe & Wooldridge, L.L.P. . . 50,000.00
Reid & Priest LLP . . . . . . . . . . . . 50,000.00
Richards, Layton & Finger . . . . . . . . 10,000.00
Auditors' fees . . . . . . . . . . . . . . . . 15,000.00
Rating agencies' fees . . . . . . . . . . . . 130,000.00
Printing, including Registration Statement,
prospectuses, exhibits, etc. . . . . . . . 30,000.00
Miscellaneous . . . . . . . . . . . . . . . . 58,484.85
-----------
Total expenses . . . . . . . . . . . . . . . . $500,000.00*
-----------------------
* Estimated.
ITEM 15. 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
II-1
<PAGE>
under any bylaw, agreement, vote of shareholders or otherwise,
and shall be available whether or not the director, officer or
employee continues to be a director, officer or employee at
the time of incurring such expenses and liabilities. In
furtherance, and not in limitation of the foregoing provisions
of this Article IX, the Corporation may indemnify and insure
any such persons to the fullest extent permitted by the Texas
Business Corporation Act, as amended from time to time, or the
laws of the State of Texas, as in effect from time to time."
Article 2.02-1 of the Texas Business Corporation Act permits
the Company, in certain circumstances, to indemnify any present
or former director, officer, employee or agent of the Company
against judgments, penalties, fines, settlements and reasonable
expenses incurred in connection with a proceeding in which any
such person was, is or is threatened to be, made a party by
reason of holding such office or position, but only to a limited
extent for obligations resulting from a proceeding in which the
person is found liable on the basis that a personal benefit was
improperly received or in circumstances in which the person is
found liable in a derivative suit brought on behalf of the
Company.
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 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.
II-2
<PAGE>
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.
Directors and officers of the Company also have insurance which
insures them against certain other liabilities and expenses.
ITEM 16. EXHIBITS.
PREVIOUSLY FILED*
------------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
------- ------ -------
1(a) -- Form of Underwriting Agreement.
3(a) 0-11442 3(a) -- Restated Articles of
Form 10-K Incorporation of the Company
1993
3(b) 33-64694 4(c) -- Bylaws of the Company, as
amended.
3(c) -- Trust Agreement of TU Electric
Capital IV.
3(d) -- Trust Agreement of TU Electric
Capital V.
4(a) -- Form of Amended and Restated
Trust Agreement.
4(b) 0-11442 4(f) -- Indenture (For Unsecured
Subordinated Debt Securities
relating to Trust Securities),
dated as of December 1, 1995
between the Company and The Bank
of New York as Trustee.
4(c) -- Form of Officer's Certificate to
be used in connection with the
issuance of Preferred Securities
of TU Electric Capital IV.
4(d) -- Form of Officer's Certificate to
be used in connection with the
issuance of Preferred Securities
of TU Electric Capital V.
4(e) -- Form of Guarantee Agreement
relating to Preferred Securities.
4(f) -- Form of Agreement as to Expenses
and Liabilities relating to
Preferred Securities.
4(g) -- Form of Preferred Securities.
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.
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 (see page II-
5).
25(a) -- Statement on Form T-1 of The Bank
of New York relating to Amended
and Restated Trust Agreement for
TU Electric Capital IV.
25(b) -- Statement on Form T-1 of The Bank
of New York relating to Amended
and Restated Trust Agreement for
TU Electric Capital V.
25(c) -- Statement on Form T-1 of The Bank
of New York relating to Inden-
ture.
25(d) -- Statement on Form T-1 of The Bank
of New York relating to Guarantee
Agreement relating to Preferred
Securities of TU Electric Capital
IV.
25(e) -- Statement on Form T-1 of The Bank
of New York relating to Guarantee
Agreement relating to Preferred
Securities of TU Electric Capital
V.
-----------------------
*Incorporated herein by reference.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
Annual Report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities offered
herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(5) 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 Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 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 Securities Act of 1933, and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
POWER OF ATTORNEY
EACH DIRECTOR, AND/OR OFFICER OF TEXAS UTILITIES ELECTRIC
COMPANY WHOSE SIGNATURE APPEARS BELOW HEREBY APPOINTS THE AGENTS
FOR SERVICE NAMED IN THIS REGISTRATION STATEMENT, AND EACH OF
THEM SEVERALLY, AS HIS ATTORNEY-IN-FACT TO SIGN IN HIS NAME AND
BEHALF, IN ANY AND ALL CAPACITIES STATED BELOW, AND TO FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION, ANY AND ALL AMENDMENTS,
INCLUDING POST-EFFECTIVE AMENDMENTS, TO THIS REGISTRATION
STATEMENT, AND EACH OF THE REGISTRANTS HEREBY ALSO APPOINTS EACH
SUCH AGENT FOR SERVICE AS ITS ATTORNEY-IN-FACT WITH LIKE
AUTHORITY TO SIGN AND FILE ANY SUCH AMENDMENTS IN ITS NAMES AND
ON ITS BEHALF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM
S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
THE CITY OF DALLAS, AND STATE OF TEXAS, ON THE 15TH DAY OF
JANUARY, 1997.
TEXAS UTILITIES ELECTRIC COMPANY
BY /S/ ERLE NYE
-----------------------------
(ERLE NYE, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURES TITLE DATE
---------- ----- ----
/S/ ERLE NYE
-------------------------------- PRINCIPAL JANUARY 15, 1997
(ERLE NYE, CHAIRMAN OF THE BOARD EXECUTIVE
AND CHIEF EXECUTIVE) OFFICER AND
DIRECTOR
/S/ ROBERT S. SHAPARD
-------------------------------- PRINCIPAL JANUARY 15, 1997
(ROBERT S. SHAPARD, TREASURER FINANCIAL
AND ASSISTANT SECRETARY) OFFICER
/S/ MARC D. MOSELEY
-------------------------------- PRINCIPAL JANUARY 15, 1997
(MARC D. MOSELEY, ACTING ACCOUNTING
CONTROLLER) OFFICER
/S/ T.L. BAKER
-------------------------------- DIRECTOR JANUARY 15, 1997
(T.L. BAKER)
/S/ J.S. FARRINGTON
-------------------------------- DIRECTOR JANUARY 15, 1997
(J.S. FARRINGTON)
-------------------------------- DIRECTOR JANUARY , 1997
(H. JARRELL GIBBS)
/S/ MICHAEL J. MCNALLY
-------------------------------- DIRECTOR JANUARY 15, 1997
(MICHAEL J. MCNALLY)
/S/ W.M. TAYLOR
-------------------------------- DIRECTOR JANUARY 15, 1997
(W. M. TAYLOR)
-------------------------------- DIRECTOR JANUARY , 1997
(E. L. WATSON)
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM
S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
THE CITY OF DALLAS, AND STATE OF TEXAS, ON THE 15TH DAY OF
JANUARY, 1997.
TU ELECTRIC CAPITAL IV
BY: /S/ MICHAEL PERKINS
--------------------------------------
MICHAEL PERKINS, NOT IN HIS INDIVIDUAL
CAPACITY BUT SOLELY AS TRUSTEE
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM
S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
THE CITY OF DALLAS, AND STATE OF TEXAS, ON THE 15TH DAY OF
JANUARY, 1997.
TU ELECTRIC CAPITAL V
BY: /S/ MICHAEL PERKINS
-----------------------------
MICHAEL PERKINS, NOT IN HIS INDIVIDUAL
CAPACITY BUT SOLELY AS TRUSTEE
II-7
<PAGE>
EXHIBIT INDEX
PREVIOUSLY FILED*
------------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
------- ------ -------
1(a) -- Form of Underwriting Agreement.
3(a) 0-11442 3(a) -- Restated Articles of
Form 10-K Incorporation of the Company
1993
3(b) 33-64694 4(c) -- Bylaws of the Company, as
amended.
3(c) -- Trust Agreement of TU Electric
Capital IV.
3(d) -- Trust Agreement of TU Electric
Capital V.
4(a) -- Form of Amended and Restated
Trust Agreement.
4(b) 0-11442 4(f) -- Indenture (For Unsecured
Subordinated Debt Securities
relating to Trust Securities),
dated as of December 1, 1995
between the Company and The Bank
of New York as Trustee.
4(c) -- Form of Officer's Certificate to
be used in connection with the
issuance of Preferred Securities
of TU Electric Capital IV.
4(d) -- Form of Officer's Certificate to
be used in connection with the
issuance of Preferred Securities
of TU Electric Capital V.
4(e) -- Form of Guarantee Agreement
relating to Preferred Securities.
4(f) -- Form of Agreement as to Expenses
and Liabilities relating to
Preferred Securities.
4(g) -- Form of Preferred Securities.
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.
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 (see page II-
5).
25(a) -- Statement on Form T-1 of The Bank
of New York relating to Amended
and Restated Trust Agreement for
TU Electric Capital IV.
25(b) -- Statement on Form T-1 of The Bank
of New York relating to Amended
and Restated Trust Agreement for
TU Electric Capital V.
25(c) -- Statement on Form T-1 of The Bank
of New York relating to Inden-
ture.
25(d) -- Statement on Form T-1 of The Bank
of New York relating to Guarantee
Agreement relating to Preferred
Securities of TU Electric Capital
IV.
25(e) -- Statement on Form T-1 of The Bank
of New York relating to Guarantee
Agreement relating to Preferred
Securities of TU Electric Capital
V.
-----------------------
*Incorporated herein by reference.
Exhibit 1(a)
TU ELECTRIC CAPITAL
Securities
UNDERWRITING AGREEMENT
----------------------
, 1997
as Representatives of the Underwriters
named in this Agreement
Ladies and Gentlemen:
1. Introduction. Texas Utilities Electric Company, a
------------
Texas corporation (the "Company"), and its financing subsidiary,
TU Electric Capital , a Delaware business trust (the "Trust",
hereinafter together with the Company, the "Offerors") propose
for the Trust to issue and sell severally to the underwriters
named in Schedule II hereto (the "Underwriters"), the Trust's
Securities of the series designation, with
the terms and in the liquidation preference amount specified in
Schedule I hereto (the " Securities").
2. Description of Securities. The
--------------------------------------
Offerors propose for the Trust to issue the
Securities pursuant to an Amended and Restated Trust Agreement,
to be dated as of January , 1997, among The Bank of New York, as
Property Trustee, The Bank of New York (Delaware) as Delaware
Trustee and certain employees of the Company as Administrative
Trustees, in substantially the form heretofore delivered to you,
as representatives of the Underwriters, said Agreement being
hereinafter referred to as the "Trust Agreement". In connection
with the issuance of the Securities, the Company
proposes (i) to issue its % Junior Subordinated Debentures
(the "Debentures") pursuant to an Indenture, dated as of December
1, 1995, between the Company and The Bank of New York, as trustee
(the "Indenture") and (ii) to issue a guarantee of the
Securities to the extent described in the Prospectus (as defined
below) (the "Guarantee").
3. Representations and Warranties of the Offerors.
----------------------------------------------
The Offerors represent and warrant to the several Underwriters
that:
(a) The Offerors and TU Electric Capital have
filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3,
including a prospectus, on January , 1997
(Registration Nos. 333- and 333- -01) for the
registration of $500,000,000 aggregate liquidation
preference amount of trust securities ("Securities"), a like
principal amount of the Company's Junior Subordinated
Debentures, one or more Guarantees and other obligations of
the Company under the Securities Act of 1933, as amended
(the "Securities Act"). Such registration statement was
declared effective by the Commission on , 1997.
References herein to the term "Registration Statement" as of
any date shall be deemed to refer to registration statement
Nos. 333- and 333- -01, as amended or supplemented
to such date, including all documents incorporated by
reference therein as of such date pursuant to Item 12 of
Form S-3 ("Incorporated Documents"). References herein to
the term "Prospectus" as of any given date shall be deemed
to refer to the prospectus forming a part of registration
statement Nos. 333- and 333- -01, as amended or
supplemented as of such date (other than by amendments or
supplements relating to Securities other than the
Securities), including all Incorporated Documents as of
such date and including the prospectus supplement subject to
completion with respect to the Securities, the
Debentures and the related Guarantee included in the
Registration Statement, as amended and supplemented as of
such date. References herein to the term "Effective Date"
shall be deemed to refer to the time and date registration
statement Nos. 333- and 333- -01 was declared
effective or the time and date of the filing thereafter of
the Company's most recent Annual Report on Form 10-K if such
filing is made prior to the Closing Date, as hereinafter
defined. The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus after
the date of this Agreement and prior to the Closing Date, as
hereinafter defined, without prior notice to the
Underwriters, or to which Counsel for the Underwriters shall
reasonably object in writing. For the purposes of this
Agreement, any Incorporated Document filed with the
Commission on a date prior to the Closing Date, as
hereinafter defined, shall be deemed an amendment or
supplement to the Registration Statement and the Prospectus.
(b) On the Effective Date, the Registration Statement
and the Prospectus fully complied and at the Closing Date,
as hereinafter defined, the Registration Statement, the
Prospectus, the Trust Agreement, the Indenture and the
Guarantee will fully comply in all material respects with
the applicable provisions of the Securities Act, the Trust
Indenture Act of 1939, as amended ("Trust Indenture Act"),
and the applicable rules and regulations of the Commission
thereunder; on the Effective Date the Registration Statement
did not, and at the Closing Date, as hereinafter defined,
the Registration Statement will not, contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; on the Effective Date the
Prospectus did not, and at the Closing Date, as hereinafter
defined, and on the date it is filed with, or transmitted
for filing to, the Commission pursuant to Rule 424 of the
General Rules and Regulations of the Securities Act ("Rule
424"), the Prospectus will not, contain an untrue statement
of a material fact or omit to state a material fact neces-
sary in order to make the statements therein, in the light
of the circumstances under which they were made, not
misleading; and on said dates the Incorporated Documents,
taken together as a whole, fully complied or will comply in
all material respects with the applicable provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the applicable rules and regulations of the
Commission thereunder, and, when read together with the
Prospectus on said dates, did not and will not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that
the foregoing representations and warranties in this
paragraph (b) shall not apply to statements or omissions
made in reliance upon information furnished in writing to
the Company by, or on behalf of, any Underwriter for use in
connection with the preparation of the Registration
Statement or the Prospectus or to any statements in or
omissions from the Statement of Eligibility and
Qualification under the Trust Indenture Act, or amendments
thereto, of the trustee under each of the Trust Agreement,
the Indenture and the Guarantee.
(c) The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will
not result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust or other agreement or instrument to which the
Company is now a party.
4. Purchase and Sale.
-----------------
(a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions
herein set forth, the Trust shall sell to each of the
Underwriters, and each Underwriter shall purchase from the
Trust, at the time and place herein specified, severally and
not jointly, the respective liquidation preference amount of
the Securities set forth opposite the name of
such Underwriter in Schedule II attached hereto, at the
purchase price or prices set forth in Schedule I hereto.
(b) The Company shall pay to the Underwriters a
commission equal to % of the aggregate liquidation
preference amount of the Securities.
5. Time and Place of Closing. Delivery of the
-------------------------
Securities against payment therefor by certified or
official bank check or checks payable to the Company or pursuant
to its order in New York Clearing House funds shall be made at
the offices of Reid & Priest LLP, 40 West 57th Street, New York,
New York, at 10:00 A.M., New York Time, on , 1997, or
at such other place, time and date as shall be agreed upon in
writing by the Offerors and you or established in accordance with
the following paragraph. The hour and date of such delivery and
payment are herein called the "Closing Date". The
Securities shall be delivered to you for the respective accounts
of the Underwriters in fully registered form in such
denominations of $ or any multiple thereof and registered in
such names as you shall reasonably request in writing not later
than the close of business on the [fourth] business day prior to
the Closing Date, or, to the extent not so requested, registered
in the names of the respective Underwriters in such authorized
denominations as the Company shall determine. The Trust agrees
to make the Securities available to you for checking
purposes not later than 10:00 A.M., New York Time, on the last
business day preceding the Closing Date at the office of The Bank
of New York, 101 Barclay Street, 7th Floor East, New York, New
York.
If any Underwriter shall fail or refuse (otherwise than
for some reason sufficient to justify, in accordance with the
terms hereof, the cancellation or termination of its obligations
hereunder) to purchase and pay for the liquidation preference
amount of the Securities which such Underwriter has
agreed to purchase and pay for hereunder, the Company shall
immediately give notice to the other Underwriters of the default
of such Underwriter, and the other Underwriters shall have the
right within 24 hours after the receipt of such notice to
determine to purchase, or to procure one or more others, who are
members of the National Association of Securities Dealers, Inc.
("NASD") (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no sales
within the United States, its territories or its possessions or
to persons who are citizens thereof or residents therein and (ii)
in making sales to comply with the NASD's Rules of Fair Practice)
and satisfactory to the Company, to purchase, upon the terms
herein set forth, the liquidation preference amount of the
Securities which the defaulting Underwriter had agreed to
purchase. If any non-defaulting Underwriter or Underwriters
shall determine to exercise such right, such Underwriter or
Underwriters shall give written notice to the Company of the
determination in that regard within 24 hours after receipt of
notice of any such default, and thereupon the Closing Date shall
be postponed for such period, not exceeding three business days,
as the Company shall determine. If in the event of such a
default no non-defaulting Underwriter shall give such notice,
then this Agreement may be terminated by the Company, upon like
notice given to the non-defaulting Underwriters, within a further
period of 24 hours. If in such case the Company shall not elect
to terminate this Agreement, it shall have the right,
irrespective of such default:
(a) to require such non-defaulting Underwriters to
purchase and pay for the respective liquidation preference
amounts of Securities which they had severally
agreed to purchase hereunder as hereinabove provided and, in
addition, the liquidation preference amounts of
Securities which the defaulting Underwriter shall have so
failed to purchase up to a liquidation preference amount
thereof equal to one-ninth (1/9) of the respective
liquidation preference amounts of the
Securities which such non-defaulting Underwriters have
otherwise agreed to purchase hereunder, and/or
(b) to procure one or more persons, who are members of
the NASD (or, if not members of the NASD, who are not
eligible for membership in the NASD and who agree (i) to
make no sales within the United States, its territories or
its possessions or to persons who are citizens thereof or
residents therein and (ii) in making sales to comply with
the NASD's Rules of Fair Practice), to purchase, upon the
terms herein set forth, either all or a part of the
liquidation preference amount of the Securities
which such defaulting Underwriter had agreed to purchase or
that portion thereof which the remaining Underwriters shall
not be obligated to purchase pursuant to the foregoing
clause (a).
In the event the Company shall exercise its rights under (a)
and/or (b) above, the Company shall give written notice thereof
to the non-defaulting Underwriters within such further period of
24 hours, and thereupon the Closing Date shall be postponed for
such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred
to in this Section 5, there shall be excluded a period of 24
hours in respect of each Saturday, Sunday or legal holiday which
would otherwise be included in such period of time.
Any action taken by the Company under this Section 5
shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
Termination by the Company under this Section 5 shall be without
any liability on the part of the Company or any non-defaulting
Underwriter, except as otherwise provided in Sections 6(g) and 9
hereof.
6. Covenants of the Company. The Company agrees
------------------------
that:
(a) It will promptly deliver to each of you a signed
copy of the Registration Statement as originally filed or,
to the extent a signed copy is not available, a conformed
copy, certified by an officer of the Company to be in the
form as originally filed, including all Incorporated
Documents and exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable
after the date hereof, as many copies of the Prospectus as
of such date as you may reasonably request.
(c) It will cause the Prospectus to be filed with, or
transmitted for filing to, the Commission pursuant to Rule
424 as soon as practicable and advise you of the issuance of
any stop order under the Securities Act with respect to the
Registration Statement or the institution of any proceedings
therefor of which the Offerors shall have received notice.
The Company will use its best efforts to prevent the
issuance of any such stop order and to secure the prompt
removal thereof if issued.
(d) If, during such period of time (not exceeding nine
months) after the Prospectus has been filed with, or
transmitted for filing to, the Commission pursuant to Rule
424 as in the opinion of Counsel for the Underwriters a
prospectus covering the Securities is required
by law to be delivered in connection with sales by an
Underwriter or dealer, any event relating to or affecting
the Company or of which the Company shall be advised in
writing by you shall occur which in the Company's reasonable
opinion should be set forth in a supplement to, or an
amendment of, the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances when it is
delivered to a purchaser, the Company will, at its expense,
amend or supplement the Prospectus by either (i) preparing
and furnishing to you at the Company's expense a reasonable
number of copies of a supplement or supplements or an
amendment or amendments to the Prospectus or (ii) making an
appropriate filing pursuant to Section 13 of the Exchange
Act, which will supplement or amend the Prospectus so that,
as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading; provided that
should such event relate solely to the activities of any of
the Underwriters, then the Underwriters shall assume the
expense of preparing and furnishing any such amendment or
supplement. In case any Underwriter is required to deliver
a prospectus after the expiration of nine months from the
date the Prospectus is filed with, or transmitted for filing
to, the Commission pursuant to Rule 424, the Company, upon
your request, will furnish to you, at the expense of such
Underwriter, a reasonable quantity of a supplemental
prospectus or supplements to the Prospectus complying with
Section 10(a) of the Securities Act.
(e) It will make generally available to its security
holders and the security holders of the Trust, as soon as
practicable, an earning statement (which need not be
audited) covering a period of at least twelve months
beginning not earlier than the first day of the month next
succeeding the month in which occurred the effective date of
the Registration Statement as defined in Rule 158 under the
Securities Act.
(f) It will furnish such proper information as may be
lawfully required and otherwise cooperate in qualifying the
Securities for offer and sale under the blue-sky
laws of such jurisdictions as you may designate, provided
that the Offerors shall not be required to qualify as a
foreign corporation or dealer in securities, to file any
consents to service of process under the laws of any
jurisdiction, or to meet any other requirements deemed by
the Offerors to be unduly burdensome.
(g) It will, except as herein provided, pay all
expenses and taxes (except transfer taxes) in connection
with (i) the preparation and filing by it of the
Registration Statement, (ii) the issuance and delivery of
the Securities as provided in Section 5 hereof,
(iii) the preparation, execution and filing by it of the
Supplemental Indenture, (iv) the qualification of the
Securities under blue-sky laws (including counsel fees
not to exceed $7,500), and (v) the printing and delivery to
the Underwriters of reasonable quantities of the
Registration Statement and, except as provided in Section
6(d) hereof, of the Prospectus. The Company shall not,
however, be required to pay any amount for any expenses of
yours or any of the Underwriters, except that, if this
Agreement shall be terminated in accordance with the
provisions of Section 7, 8 or 10 hereof, the Company will
reimburse you for the fees and disbursements of Counsel for
the Underwriters, whose fees and disbursements the
Underwriters agree to pay in any other event, and will
reimburse the Underwriters for their reasonable out-of-
pocket expenses, in an aggregate amount not exceeding
$5,000, incurred in contemplation of the performance of this
Agreement. The Company shall not in any event be liable to
any of the several Underwriters for damages on account of
loss of anticipated profits.
7. Conditions of Underwriters' Obligations. The
---------------------------------------
obligations of the Underwriters to purchase and pay for the
Securities shall be subject to the accuracy of the rep-
resentations and warranties made herein on the part of the
Offerors, to the performance by the Offerors of their obligations
to be performed hereunder prior to the Closing Date, and to the
following conditions:
(a) The Prospectus shall have been filed with, or
transmitted for filing to, the Commission pursuant to Rule
424 prior to 6:00 P.M., New York Time, on the second
business day after the date of this Agreement, or such other
time and date as may be approved by you.
(b) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no
proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and you
shall have received a certificate, dated the Closing Date
and signed by an officer of the Company, to the effect that
no such stop order is in effect and that no proceedings for
such purpose are pending before, or to the knowledge of the
Company threatened by, the Commission.
(c) On the Closing Date, you shall have received from
Richards, Layton & Finger, Delaware counsel for the Company,
Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for
the Company, Reid & Priest LLP, of counsel for the Company,
and Winthrop, Stimson, Putnam & Roberts, Counsel for the
Underwriters, opinions in substantially the form and
substance prescribed in Schedules III, IV, V and VI hereto
(i) with such changes therein as may be agreed upon by the
Company and you, with the approval of Counsel for the
Underwriters, and (ii) if the Prospectus relating to the
Securities shall be supplemented or amended after
the Prospectus shall have been filed with, or transmitted
for filing to, the Commission pursuant to Rule 424, with any
changes therein necessary to reflect such supplementation or
amendment.
(d) On and as of the date hereof, you shall have
received from Deloitte & Touche LLP a letter to the effect
that (i) they are independent certified public accountants
with respect to the Company, within the meaning of the
Securities Act and the applicable published rules and
regulations thereunder, (ii) in their opinion, the financial
statements audited by them and included or incorporated by
reference in the Prospectus comply as to form in all
material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder, (iii) on the basis of a reading of
the unaudited amounts of operating revenues and net income
included or incorporated by reference in the Prospectus and
the related financial statements from which these amounts
were derived, the latest available unaudited financial
statements of the Company and the minute books of the
Company and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it
being understood that the foregoing procedures do not
constitute an audit made in accordance with generally
accepted auditing standards and would not necessarily reveal
matters of significance with respect to the comments made in
such letter, and accordingly that Deloitte & Touche LLP
makes no representation as to the sufficiency of such
procedures for the several Underwriters' purposes), nothing
has come to their attention which caused them to believe
that (A) the unaudited financial statements incorporated by
reference in the Prospectus were not determined in accor-
dance with generally accepted accounting principles applied
on a basis substantially consistent with that of the
corresponding amounts in the latest available audited
financial statements, (B) the unaudited amounts of operating
revenues and net income of the Company included or
incorporated by reference in the Prospectus were not
determined on a basis substantially consistent with that of
the corresponding amounts in the audited statements of
income incorporated by reference in the Prospectus, (C) for
the twelve months ended as of the date of the latest
available financial statements of the Company, there were
any decreases in operating revenues or net income as
compared with the comparable period of the preceding year,
and (D) at a specified date not more than seven days prior
to the date of such letter, there was any change in the
capital stock of the Company, short-term bank loans,
commercial paper, notes payable to Texas Utilities Company
or long-term debt of the Company or decrease in its net
assets, in each case as compared with amounts shown in the
most recent balance sheet incorporated by reference in the
Prospectus, except in all instances for changes or decreases
that the Prospectus discloses have occurred or may occur or
which are occasioned by the declaration of a regular
quarterly dividend or the acquisition of long-term debt for
sinking fund purposes, or which are described in such
letter, and (iv) they have compared the dollar amounts (or
percentages or ratios derived from such dollar amounts) and
other financial information included or incorporated by
reference in the Registration Statement and the Prospectus
as reasonably requested by you (in each case to the extent
that such dollar amounts, percentages and other financial
information are derived from the general accounting records
of the Company subject to the internal controls of the
Company's accounting system or are derived indirectly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general
accounting records and other procedures specified in such
letter, and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter. On
and as of the Closing Date you shall have received from
Deloitte & Touche LLP a letter to the effect that such
accountants reaffirm as of the Closing Date and as though
made on the Closing Date the statements made in the letter
furnished by such accountants on , 1997.
(e) Since the most recent dates as of which in-
formation is given in the Registration Statement or the
Prospectus there shall not have been any material adverse
change in the business, property or financial condition of
the Company and, since such dates, there shall not have been
any material transaction entered into by the Company, in
each case other than transactions in the ordinary course of
business and transactions contemplated by the Registration
Statement or Prospectus and at the Closing Date you shall
have received a certificate to such effect dated the Closing
Date and signed by an officer of the Company.
(f) All legal proceedings to be taken in connection
with the issuance and sale of the Securities
shall have been satisfactory in form and substance to Coun-
sel for the Underwriters.
In case any of the conditions specified above in this
Section 7 shall not have been fulfilled, this Agreement may be
terminated with the consent of Underwriters which have agreed to
purchase in the aggregate 50% or more of the liquidation
preference amount of the Securities upon notice
thereof to the Company. Any such termination shall be without
liability of any party to any other party except as otherwise
provided in Sections 6(g) and 9 hereof.
8. Conditions of Company's Obligations. The
-----------------------------------
obligation of the Company to deliver the Securities
shall be subject to the conditions that the Prospectus shall have
been filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 prior to 6:00 P.M., New York Time, on the
second business day after the date of this Agreement or such
other time and date as may be approved by the Company, and no
stop order suspending the effectiveness of the Registration
Statement shall be in effect at the Closing Date and no
proceedings for that purpose shall be pending before, or
threatened by, the Commission at the Closing Date. In case these
conditions shall not have been fulfilled, this Agreement may be
terminated by the Company upon notice thereof to you. Any such
termination shall be without liability of any party to any other
party except as otherwise provided in Sections 6(g) and 9 hereof.
9. Indemnification.
---------------
(a) The Offerors shall jointly and severally
indemnify, defend and hold harmless each Underwriter and
each person who controls any Underwriter within the meaning
of Section 15 of the Securities Act from and against any and
all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject
under the Securities Act or any other statute or common law
and shall reimburse each such Underwriter and controlling
person for any legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees)
incurred by them in connection with investigating any such
losses, claims, damages or liabilities or in connection with
defending any actions, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus prior to the Effective Date, or in the
Registration Statement or the Prospectus, or the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein in the light of the circumstances under which they
were made not misleading; provided, however, that the
indemnity agreement contained in this Section 9 shall not
apply to any such losses, claims, damages, liabilities,
expenses or actions arising out of, or based upon, any such
untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission
was made in reliance upon information furnished in writing
to the Offerors by any Underwriter, through you or
otherwise, for use in connection with the preparation of the
Registration Statement or the Prospectus or any amendment or
supplement to either thereof, or arising out of, or based
upon, statements in or omissions from that part of the
Registration Statement which shall constitute the Statement
of Eligibility and Qualification under the Trust Indenture
Act of the Trustee under the Mortgage; and provided further,
that the indemnity agreement contained in this Section 9
shall not inure to the benefit of any Underwriter (or of any
person controlling such Underwriter) on account of any such
losses, claims, damages, liabilities, expenses or actions
arising from the sale of the Securities to any
person if a copy of the Prospectus (exclusive of the
Incorporated Documents) shall not have been given or sent to
such person by or on behalf of such Underwriter with or
prior to the written confirmation of the sale involved
unless, with respect to the delivery of any amendment or
supplement to the Prospectus, the alleged omission or
alleged untrue statement was not corrected in such amendment
or supplement at the time of such written confirmation. The
indemnity agreement of the Offerors contained in this
Section 9 and the representations and warranties of the
Offerors contained in Section 3 hereof shall remain
operative and in full force and effect regardless of any
termination of this Agreement or of any investigation made
by or on behalf of any Underwriter or any such controlling
person, and shall survive the delivery of the
Securities.
(b) Each Underwriter shall indemnify, defend and hold
harmless the Offerors, their officers and directors, and
each person who controls either of the Offerors within the
meaning of Section 15 of the Securities Act, from and
against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become
subject under the Securities Act or any other statute or
common law and shall reimburse each of them for any legal or
other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the
Prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished in writing to the Offerors by or on
behalf of such Underwriter, through you or otherwise, for
use in connection with the preparation of the Registration
Statement or the Prospectus or any amendment or supplement
to either thereof. Each Underwriter hereby furnishes to the
Offerors in writing expressly for use in the Prospectus (i)
the statements relating to offerings by the Underwriters on
the cover page, (ii) the statements in the first paragraph
on page [ ] concerning stabilization and over allotment by
the Underwriters, and (iii) under "Underwriting", the list
of underwriters, statements in the third paragraph
concerning the offering of the Securities, the
third, fourth and fifth sentences of the fifth paragraph,
concerning market making for the Securities.
The indemnity agreement of the respective Underwriters
contained in this Section 9 shall remain operative and in
full force and effect regardless of any termination of this
Agreement or of any investigation made by or on behalf of
either Offeror, its directors or its officers, any such
Underwriter, or any such controlling person, and shall
survive the delivery of the Securities.
(c) The Company, the Trust and the several
Underwriters each shall, upon the receipt of notice of the
commencement of any action against it or any person
controlling it as aforesaid, in respect of which indemnity
may be sought on account of any indemnity agreement
contained herein, promptly give written notice of the
commencement thereof to the party or parties against whom
indemnity shall be sought hereunder, but the omission so to
notify such indemnifying party or parties of any such action
shall not relieve such indemnifying party or parties from
any liability which it or they may have to the indemnified
party otherwise than on account of such indemnity agreement.
In case such notice of any such action shall be so given,
such indemnifying party shall be entitled to participate at
its own expense in the defense, or, if it so elects, to
assume (in conjunction with any other indemnifying parties)
the defense of such action, in which event such defense
shall be conducted by counsel chosen by such indemnifying
party or parties and satisfactory to the indemnified party
or parties who shall be defendant or defendants in such
action, and such defendant or defendants shall bear the fees
and expenses of any additional counsel retained by them; but
if the indemnifying party shall elect not to assume the
defense of such action, such indemnifying party will
reimburse such indemnified party or parties for the
reasonable fees and expenses of any counsel retained by
them; provided, however, if the defendants in any such
action include both the indemnified party and the
indemnifying party and counsel for the indemnifying party
shall have reasonably concluded that there may be a conflict
of interest involved in the representation by such counsel
of both the indemnifying party and the indemnified party,
the indemnified party or parties shall have the right to
select separate counsel, satisfactory to the indemnifying
party, to participate in the defense of such action on
behalf of such indemnified party or parties (it being
understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel
representing the indemnified parties who are parties to such
action).
(d) If the indemnification provided for in sub-
paragraph (a) or (b) above shall be unenforceable under
applicable law by an indemnified party, each indemnifying
party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages, liabilities
and expenses for which each such indemnification provided
for in subparagraph (a) or (b) above shall be unenforceable,
in such proportion as shall be appropriate to reflect the
relative fault of each indemnifying party on the one hand
and the indemnified party on the other in connection with
the statements or omissions which have resulted in such
losses, claims, damages, liabilities and expenses, as well
as any other relevant equitable considerations; provided,
however, that no indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any indemnifying party not guilty of such fraudulent
misrepresentation. Relative fault shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the
indemnified party and each such party's relative intent,
knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Offerors
and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subparagraph
(d) were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to
above.
10. Termination. This Agreement may be terminated, at
-----------
any time prior to the Closing Date, by you with the consent of
the Underwriters which have agreed to purchase in the aggregate
50% or more of the aggregate liquidation preference amount of the
Securities if (a) after the date hereof and at or
prior to the Closing Date there shall have occurred any general
suspension of trading in securities on the New York Stock
Exchange or there shall have been established by the New York
Stock Exchange or by the Commission or by any federal or state
agency or by the decision of any court, any general limitation on
prices for such trading or any general restrictions on the
distribution of securities, or a general banking moratorium
declared by New York or federal authorities, or (b) there shall
have occurred any new material (i) outbreak of hostilities or
(ii) other national or international calamity or crisis,
including, but not limited to, an escalation of hostilities which
existed prior to the date of this Agreement, and the effect of
any such event specified in clause (a) or (b) above on the
financial markets of the United States shall be such as to make
it impracticable, in the reasonable judgment of the Underwriters,
for the Underwriters to enforce contracts for the sale of the
Securities. This Agreement may also be terminated at any
time prior to the Closing Date by you with the consent of the
Underwriters which have agreed to purchase in the aggregate 50%
or more of the liquidation preference amount of the
Securities, if, in your reasonable judgment, the subject matter
of any amendment or supplement to the Registration Statement or
the Prospectus (other than an amendment or supplement relating
solely to the activity of any Underwriter or Underwriters)
prepared and issued by the Company after the effectiveness of
this Agreement shall have disclosed a material adverse change in
the business, property or financial condition of the Company
which has materially impaired the marketability of the
Securities. Any termination hereof pursuant to this Section 10
shall be without liability of any party to any other party except
as otherwise provided in Sections 6(g) and 9 hereof.
11. Miscellaneous. THE VALIDITY AND INTERPRETATION OF
-------------
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Agreement shall inure to the benefit of the Company,
the several Underwriters and, with respect to the provisions of
Section 9 hereof, each director, officer and controlling person
referred to in said Section 9, and their respective successors.
Nothing herein is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right,
remedy or claim under or in respect of any provision in this
Agreement. The term "successor" as used herein shall not include
any purchaser, as such purchaser, of any of the
Securities from any of the several Underwriters.
12. Notices. All communications hereunder shall be in
-------
writing, and, if to the Underwriters, shall be mailed or
delivered to you at the address set forth above, or, if to the
Company, shall be mailed or delivered to it at 1601 Bryan Street,
Dallas, Texas 75201, Attention: Treasurer.
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please indicate your acceptance
thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding
agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
TEXAS UTILITIES ELECTRIC COMPANY
By /s/
------------------------------
(Authorized Representative)
TU ELECTRIC CAPITAL
By /s/
------------------------------
(Authorized Representative)
Accepted and delivered as of
the date first above written
By
--------------------------
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated: , 1997
Securities: ,000,000
Securities, each a "Unit"
Liquidation Preference Amount $
per Unit:
Date of Maturity: , 20
Distribution Rate: %
Purchase Price: 100%
Public Offering Price 100%
Series Designation: % Cumulative
Securities (liquidation preference $
per unit)
<PAGE>
SCHEDULE II
-----------
TU ELECTRIC CAPITAL
SECURITIES
Units of
Securities
Each
Having a
Liquidation
Preference
Name Amount of $
---- -----------
. . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . ,000,000
<PAGE>
Schedule III
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
[Date]
as Representatives of the Underwriters
named in the Underwriting Agreement,
(as defined below)
Re: TU Electric Capital
------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Texas
Utilities Electric Company, a Texas corporation (the "Company"),
and TU Electric Capital , a Delaware business trust (the
"Trust"), in connection with the matters set forth herein. At
the request of the Company and the Trust, this opinion is being
furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(a) The Certificate of Trust of the Trust, dated as of
, 1997 (the "Certificate"), as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary
of State") on , 1997;
(b) The Trust Agreement of the Trust, dated as of
, 1997, between the Company and the trustees of
the Trust named therein;
(c) The Appointment of Additional Trustees of the
Trust, dated , 1997;
(d) The Prospectus, dated , 1997 (the
"Prospectus"), relating to the %
Securities of the Trust representing preferred undivided
beneficial interests in the assets of the Trust (each, a "
Security" and collectively, the " Securities");
(e) The Amended and Restated Trust Agreement of the
Trust, dated as of , 1997 (including Exhibits B and D
thereto) (the "Trust Agreement"), among the Company, the trustees
of the Trust named therein (the "Trustees"), and the holders,
from time to time, of undivided beneficial interests in the
assets of the Trust;
(f) The Underwriting Agreement, dated , 1997
(the "Underwriting Agreement"), among the Company and ;
and
(g) A Certificate of Good Standing for the Trust,
dated , 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not
otherwise defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a)
through (g) above. In particular, we have not reviewed any
document (other than the documents listed in paragraphs (a)
through (g) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein.
We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the
statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed
to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have
assumed (i) that the Trust Agreement constitutes the entire
agreement among the parties thereto with respect to the subject
matter thereof, including with respect to the creation, operation
and termination of the Trust, and that the Trust Agreement and
the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below,
the due creation or due organization or due formation, as the
case may be, and valid existence in good standing of each party
to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to
the documents examined by us, (iv) except to the extent set forth
in paragraph 2 below, that each of the parties to the documents
examined by us has the power and authority to execute and
deliver, and to perform its obligations under, such documents,
(v) except to the extent set forth in paragraph 4 below, the due
authorization, execution and delivery by all parties thereto of
all documents examined by us, (vi) the receipt by each Person to
whom a Security is to be issued by the Trust
(collectively, the " Security Holders") of a
Securities Certificate registered in the name of such Person
for such Security and the payment for the
Security acquired by it, in accordance with the Trust Agreement
and the Prospectus, (vii) that the Securities are
issued and sold to the Security Holders in
accordance with the Trust Agreement and the Prospectus, and
(viii) that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by
the Delaware Business Trust Act and the filing of documents with
the Secretary of State) or employees in the State of Delaware.
We have not participated in the preparation of the Prospectus and
assume no responsibility for its contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion on
the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of
such questions of law and statutes of the State of Delaware as we
have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act and, under the Trust Agreement and the
Delaware Business Trust Act, has the trust power and authority to
conduct its business as described in the Prospectus, and all
filings required under the laws of the State of Delaware with
respect to the creation and valid existence of the Trust as a
business trust have been made.
2. Under the Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority to (i) own
property and conduct its business, all as described in the
Prospectus, (ii) execute and deliver, and to perform its
obligations under, the Underwriting Agreement and (iii) issue and
perform its obligations under the Trust Securities.
3. The Trust Agreement is a legal, valid and binding
agreement of the Company and the Trustees, and is enforceable
against the Company, the Trustees, in accordance with its terms.
4. Under the Trust Agreement and the Delaware
Business Trust Act, the execution and delivery of the
Underwriting Agreement by the Trust, and the performance by the
Trust of its obligations thereunder, have been duly authorized by
all requisite trust action on the part of the Trust.
5. No authorization, approval, consent or order of
any Delaware court or Delaware governmental authority or Delaware
agency is required to be obtained by the Trust solely in
connection with the issuance and sale of the
Securities.
6. The Securities have been duly
authorized by the Trust Agreement, and when issued and sold in
accordance with the Trust Agreement, the Securities
will be, subject to the qualifications set forth in paragraph 7
below, fully paid and nonassessable beneficial interests in the
assets of the Trust.
7. The Security Holders, as beneficial
owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General Corporation
Law of the State of Delaware. We note that the
Security Holders may be obligated, pursuant to the Trust
Agreement, to (i) provide indemnity and/or security in connection
with and pay taxes or governmental charges arising from transfers
or exchanges of Securities Certificates and the
issuance of replacement Securities Certificates and
(ii) provide security or indemnity in connection with requests of
or directions to the Property Trustee to exercise its rights and
powers under the Trust Agreement.
8. Under the Delaware Business Trust Act and the
Trust Agreement, the issuance of the Securities is
not subject to preemptive rights.
9. The issuance and sale by the Trust of the Trust
Securities, the execution, delivery and performance by the Trust
of the Underwriting Agreement, the consummation by the Trust of
the transactions contemplated thereby and compliance by the Trust
with its obligations thereunder do not violate (i) any of the
provisions of the Certificate or the Trust Agreement, or (ii) any
applicable Delaware law or administrative regulation.
The opinion expressed in paragraph 3 above is subject
to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance and other similar laws
relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the
effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution.
We consent to your relying as to matters of Delaware
law upon this opinion in connection with your entering into the
Underwriting Agreement. We also consent to the reliance by The
Bank of New York (in its capacity as Debenture Trustee under the
Subordinated Indenture, as trustee under the Guarantee, and as
Property Trustee under the Trust Agreement) as to matters of
Delaware law upon this opinion as if it were addressed to it in
connection with its entering into the Subordinated Debenture, the
Guarantee and the Trust Agreement. In addition, we consent to
Winthrop, Stimson, Putnam & Roberts' relying as to matters of
Delaware law upon this opinion in connection with an opinion to
be rendered by it pursuant to the Underwriting Agreement. Except
as stated above, without our prior written consent, this opinion
may not be furnished or quoted to, or relied upon by, any other
Person for any purpose.
Very truly yours,
<PAGE>
Schedule IV
[LETTERHEAD OF WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.]
, 1997
as Representatives of the Underwriters
named in the Underwriting Agreement,
dated , 1997, among Texas
Utilities Electric Company, TU Electric
Capital and such underwriters
We have acted as General Counsel to Texas
Utilities Electric Company (the "Company") in connection
with the transactions contemplated by the Underwriting
Agreement dated , 1997 among the Company, TU
Electric Capital (the "Trust") and you (the
"Underwriting Agreement"), including, among others (i) the
issuance by the Trust, a statutory business trust organized
under the Delaware Business Trust Act (the "Delaware Act")
of ,000,000 units of %
Securities (the " Securities") having an
aggregate liquidation preference amount of $ ,000,000,
(ii) the issuance by the Company of $ principal
amount of its Debentures and (iii) the guarantee by the
Company of the Securities pursuant to a
Guarantee Agreement, dated the date hereof, between the
Company and The Bank of New York, as trustee (the
"Guarantee").
Terms not otherwise defined herein are used with
the meanings ascribed to them in the Underwriting
Agreement.
In so acting we have participated in or reviewed
the corporate proceedings in connection with the
authorization, execution and delivery of the Underwriting
Agreement, the Trust Agreement, the Indenture, the
Debentures and the Guarantee. We have also examined such
other documents and satisfied ourselves as to such other
matters as we have deemed necessary as a basis for the
conclusions of law contained in the opinions expressed
below. We have relied as to various questions of fact upon
the representations and warranties of the Company contained
in the Underwriting Agreement and, where we deemed
appropriate, on certificates of public officials. We have
relied upon a certificate of the Indenture Trustee as to
the authentication of the Debentures. In our examination
we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents
submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the
Company generally, we are of the opinion that:
1. The Company is a 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.
2. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
3. The Indenture, the Trust Agreement and the
Guarantee have been duly qualified under the Trust
Indenture Act;
4. The Debentures and the Indenture have been
duly authorized, executed and delivered by the Company, the
Debentures are entitled to the benefits of the Indenture,
and the Debentures and the Indenture are legal, valid and
binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the
effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general
principles of equity;
5. The Guarantee has been duly authorized,
executed and delivered by the Company, and is enforceable
against the Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general
principles of equity;
6. The statements made in the Prospectus under
the captions "Description of the 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;
7. Neither the Company nor the Trust is, or
after giving effect to the issuance and sale of the
Securities will be, directly or indirectly controlled by,
or acting on behalf of any person which is, an investment
company within the meaning of the Investment Company Act of
1940, as amended;
8. Other than as stated in the Registration
Statement and the Prospectus, there are no material pending
legal proceedings to which the Company is a party or of
which property of the Company is the subject which depart
from the ordinary routine litigation incident to the kind
of business conducted by the Company, and to our best
knowledge no such proceedings are contemplated;
9. The Registration Statement, as amended, as of
the Effective Date, and the Prospectus as of such date
(except as to the financial statements and schedules and
other financial and statistical data contained therein as
to which we do not express any belief and except for that
part of the Registration Statement that constitutes the
Forms T-1) complied as to form in all material respects
with the applicable requirements of the Securities Act and
the applicable instructions, rules and regulations of the
Commission thereunder; the Incorporated Documents (except
as to the financial statements and schedules and other
financial and statistical data contained therein, as to
which we do not express any belief), at the time they were
filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act
and the applicable instructions, rules and regulations of
the Commission thereunder; and the Registration Statement
has become and is effective under the Securities Act and,
to our best knowledge, no proceedings for a stop order with
respect thereto are pending or threatened under Section 8
of the Securities Act; and
10. No other approval, authorization, consent or
order of any public board or body (other than in connection
or in compliance with the provisions of the blue-sky laws
of any jurisdiction) is legally required for the
authorization of the issue and sale by the Company of the
Debentures and the issuance by the Company of the
Guarantee.
In the course of the preparation of the
information relating to the Company contained in the
Prospectus (including the documents incorporated therein by
reference) we had discussions with certain of its officers
and representatives, with other counsel for the Company and
with certain of your officers and employees and your
counsel, but we made no independent verification of the
accuracy or completeness of the representations and
statements made to us by the Company or the information
included by the Company in the Prospectus and take no
responsibility therefor except as set forth in paragraph 6
above. However, our examination of the information
relating to the Company contained in the Registration
Statement and the Prospectus and our discussions did not
disclose to us anything which gives us reason to believe
that (except for financial statements and schedules and
financial and statistical data as to which we do 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 the Effective Date,
included an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
(ii) the Prospectus as of its date, included, or on the
date hereof includes an untrue statement of a material fact
or on such dates omitted or omits to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
We are members of the State Bar of Texas and do
not hold ourselves out as experts in the laws of the State
of New York. As to all matters of New York law, we have,
with your consent, relied upon the opinion of Reid & Priest
LLP, New York, New York, of Counsel to the Company.
Very truly yours,
WORSHAM, FORSYTHE &
WOOLDRIDGE L.L.P.
-----------------------
A Partner
<PAGE>
Schedule V
[LETTERHEAD OF REID & PRIEST LLP]
New York, New York
, 1997
as Representatives of the Underwriters
named in the Underwriting Agreement,
dated , 1997, among Texas
Utilities Electric Company, TU Electric
Capital and such underwriters
We have acted as counsel to Texas Utilities
Electric Company (the "Company") in connection with the
transactions contemplated by the Underwriting Agreement
dated , 1997 among the Company, TU Electric
Capital (the "Trust") and you (the "Underwriting
Agreement"), including, among others, (i) the issuance by
the Trust, a statutory business trust organized under the
Delaware Business Trust Act (the "Delaware Act") of
,000,000 units of %
Securities (the " Securities") having an
aggregate liquidation preference amount of $ ,000,000,
(ii) the issuance by the Company of $ principal
amount of its Debentures and (iii) the guarantee by the
Company of the Securities pursuant to a
Guarantee Agreement, dated the date hereof, between the
Company and The Bank of New York, as trustee (the
"Guarantee").
Terms not otherwise defined herein are used with
the meanings ascribed to them in the Underwriting
Agreement.
In so acting we have participated in or reviewed
the corporate proceedings in connection with the
authorization, execution and delivery of the Underwriting
Agreement, the Trust Agreement, the Indenture, the
Debentures and the Guarantee. We have also examined such
other documents and satisfied ourselves as to such other
matters as we have deemed necessary as a basis for the
conclusions of law contained in the opinions expressed
below. We have relied as to various questions of fact upon
the representations and warranties of the Company contained
in the Underwriting Agreement and, where we deemed
appropriate, on certificates of public officials. We have
relied upon a certificate of the Indenture Trustee as to
the authentication of the Debentures. In our examination
we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents
submitted to us as photostatic or certified copies.
Upon the basis of our familiarity with these
transactions and with the affairs and properties of the
Company generally, we are of the opinion that:
1. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
2. The Indenture, the Trust Agreement and the
Guarantee have been duly qualified under the Trust
Indenture Act;
3. The Debentures and the Indenture have been
duly authorized, executed and delivered by the Company, the
Debentures are entitled to the benefits of the Indenture,
and the Debentures and the Indenture are legal, valid and
binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the
effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general
principles of equity;
4. The Guarantee has been duly authorized,
executed and delivered by the Company, and is enforceable
against the Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general
principles of equity;
5. The statements made in the Prospectus under
the captions "Description of the 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;
6. Neither the Company nor the Trust is, or
after giving effect to the issuance and sale of the
Securities will be, directly or indirectly controlled by,
or acting on behalf of any person which is, an investment
company within the meaning of the Investment Company Act of
1940, as amended;
7. The Registration Statement, as amended, as of
the Effective Date, and the Prospectus as of such date
(except as to the financial statements and schedules and
other financial and statistical data contained therein as
to which we do not express any belief and except for that
part of the Registration Statement that constitutes the
Forms T-1) complied as to form in all material respects
with the applicable requirements of the Securities Act and
the applicable instructions, rules and regulations of the
Commission thereunder; the Incorporated Documents (except
as to the financial statements and schedules and other
financial and statistical data contained therein, as to
which we do not express any belief), at the time they were
filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act
and the applicable instructions, rules and regulations of
the Commission thereunder; and the Registration Statement
has become and is effective under the Securities Act and,
to our best knowledge, no proceedings for a stop order with
respect thereto are pending or threatened under Section 8
of the Securities Act; and
8. No other approval, authorization, consent or
order of any public board or body (other than in connection
or in compliance with the provisions of the blue-sky laws
of any jurisdiction) is legally required for the
authorization of the issue and sale by the Company of the
Debentures and the issuance by the Company of the
Guarantee.
We herewith confirm as our opinion the statements
under the caption "Certain United States Federal Income Tax
Consequences" in the Prospectus.
In the course of the preparation of the
information relating to the Company contained in the
Prospectus (including the documents incorporated therein by
reference) we had discussions with certain of its officers
and representatives, with other counsel for the Company and
with certain of your officers and employees and your
counsel, but we made no independent verification of the
accuracy or completeness of the representations and
statements made to us by the Company or the information
included by the Company in the Prospectus and take no
responsibility therefor except as set forth in the
immediately preceding paragraph and in paragraph 5 above.
However, our examination of the information relating to the
Company contained in the Registration Statement and the
Prospectus and our discussions did not disclose to us
anything which gives us reason to believe that (except for
financial statements and schedules and financial and
statistical data as to which we do 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 the Effective Date, included an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading or (ii) the Prospectus as of its
date, included or on the date hereof includes an untrue
statement of a material fact or on such dates omitted or
omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
We are members of the New York Bar and do not
hold ourselves out as experts in the laws of the State of
Texas. As to all matters of Texas law, we have, with your
consent, relied upon the opinion of Worsham, Forsythe &
Wooldridge, L.L.P., Dallas, Texas, General Counsel for the
Company. We believe that you and we are justified in
relying on such opinion.
Very truly yours,
REID & PRIEST LLP
<PAGE>
SCHEDULE VI
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
[Date]
as Representatives of the Underwriters
named in the Underwriting Agreement,
dated , 1997 between Texas
Utilities Electric Company, TU Electric
Capital and such underwriters
We have acted as counsel to you and the several
Underwriters in connection with the transactions
contemplated by the Underwriting Agreement dated
, 1995 between Texas Utilities Electric Company (the
"Company"), TU Electric Capital (the "Trust") and you
(the "Underwriting Agreement") in which (i) the Trust, a
statutory business trust organized under the Delaware
Business Trust Act, proposes to issue $ ,000,000
aggregate liquidation preference amount of its %
Cumulative Securities Due
, 20 (the " Securities"), (ii) the
Company proposes to issue $ principal amount of
its % Junior Subordinated Debentures, Series , Due
, (the "Debenture") and (iii) the Company
proposes to guarantee the Securities to the
extent described in the Prospectus. Terms not otherwise
defined herein are used with the meanings ascribed to them
in the Underwriting Agreement.
We are members of the New York Bar and do not
hold ourselves out as experts in the laws of the State of
Texas. We have, with your consent, relied upon an opinion
of even date herewith addressed to you by Worsham, Forsythe
& Wooldridge, L.L.P., Dallas, Texas, General Counsel for
the Company, as to the matters covered in such opinion and
believe that it is satisfactory and that you and we are
justified in relying thereon. We understand that you are
relying, for all matters of Delaware law, upon an opinion
of even date herewith addressed to you by Richards, Layton
& Finger, Delaware Counsel for the Company.
We have, in addition, examined the documents
described in the list of closing papers as having been
delivered to you at the closing and such other documents
and satisfied ourselves as to such other matters as we have
deemed necessary in order to enable us to express this
opinion. As to various questions of fact material to this
opinion, we have relied upon representations of the Company
and statements in the Registration Statement hereinafter
mentioned. In such examination we have assumed the
genuineness of all signatures, the authenticity of all
documents submitted to us and the genuineness and
conformity to original documents of documents submitted to
us as certified or photostatic copies.
Based upon the foregoing, we are of the opinion
that:
1. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
2. The Indenture has been duly qualified under
the Trust Indenture Act.
3. The Debentures and the Indenture have been
duly authorized, executed and delivered by the Company, the
Debentures are entitled to the benefits of the Indenture,
and the Debentures and the Indenture are legal, valid and
binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the
effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other
laws affecting the rights and remedies of creditors
generally and of general principles of equity.
4. The Guarantee has been duly authorized,
executed and delivered by the Company, and is enforceable
against the Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other
laws affecting the rights and remedies of creditors
generally and of general principles of equity.
5. The statements made in the Prospectus under
the captions "Description of the 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.
6. Neither the Company nor the Trust is, or
after giving effect to the issuance and sale of the
Securities, will be, and neither the Company nor the
Trust is directly or indirectly controlled by, or acting on
behalf of any person which is, an investment company within
the meaning of the Investment Company Act of 1940.
7. No other approval, authorization, consent or
order of any public board or body (other than in connection
or in compliance with the provisions of the blue-sky laws
of any jurisdiction) is legally required for the
authorization of the issue and sale by the Company of the
Debentures and the Guarantee as contemplated in the
Underwriting Agreement.
8. The Registration Statement, as amended, at
the Effective Date thereof, and the Prospectus at the time
it was filed with or transmitted for filing to the
Commission pursuant to Rule 424 (except in each case as to
financial statements and schedules and other financial and
statistical data contained or incorporated by reference
therein and except for that part of the Registration
Statement that constitutes the Forms T-1, upon which we
express no opinion), complied as to form in all material
respects with the Securities Act.
In passing upon the form of the Registration
Statement and the form of the Prospectus, we necessarily
assume the correctness and completeness of the statements
made by the Company and the information included in the
Registration Statement and the Prospectus and take no
responsibility therefor, except insofar as such statements
relate to us and as set forth in paragraph 5 above. In the
course of the preparation by the Company of the
Registration Statement and the Prospectus, we have had
discussions with certain of its officers and
representatives, with counsel for the Company, with
Deloitte & Touche, LLP, the independent auditors who
audited certain of the financial statements incorporated by
reference in the Registration Statement and the Prospectus
and with certain of your representatives. Our examination
of the Registration Statement and the Prospectus and our
discussions did not disclose to us any information which
gives us reason to believe that at the Effective Date the
Registration Statement contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the time
it was filed with or transmitted for filing to the
Commission pursuant to Rule 424, or at the date hereof,
included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
We do not express any opinion as to the financial
statements or other financial or statistical data contained
or incorporated by reference in the Registration Statement
or Prospectus or as to that part of the Registration
Statement that constitutes the Forms T-1.
This opinion is given to you solely for the use
of the several Underwriters in connection with the
Underwriting Agreement and the transactions contemplated
thereunder and may not be relied upon by any other person
or for any other purpose.
Very truly yours,
Exhibit 3(c)
TRUST AGREEMENT
OF TU ELECTRIC CAPITAL IV
This TRUST AGREEMENT of TU Electric Capital IV (the
"Trust"), dated as of January 8, 1997, among (i) Texas Utilities
Electric Company, a Texas corporation (the "Depositor"), (ii) The
Bank of New York, a New York banking corporation, not in its
individual capacity but solely as trustee of the Trust, (iii) The
Bank of New York (Delaware), a Delaware banking corporation, not
in its individual capacity but solely as trustee of the Trust,
and (iv) Wayne E. Patterson, an individual employed by the
Depositor, not in his individual capacity but solely as trustee
of the Trust (the "Administrative Trustee")(the Administrative
Trustee, together with any administrative trustees appointed by
the Depositor after the date hereof, the "Administrative Trust-
ees")(each of such trustees in (ii), (iii) and (iv) a "Trustee"
and collectively, the "Trustees"). The Depositor and the Trust-
ees hereby agree as follows:
1. The trust created hereby shall be known as "TU
Electric Capital IV", in which name the Trustees, or the Deposi-
tor to the extent provided herein, may conduct the business of
the Trust , make and execute contracts, and sue and
be sued.
2. The Depositor hereby assigns, transfers, conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801 et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the
Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Secretary of
State of the State of Delaware in accordance with the provisions
of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Trust Agreement, satisfactory to each such
party and substantially in the form to be included as an exhibit
to the 1933 Act Registration Statement referred to below, to
provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and
delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with
respect of the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals
required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize
and direct each of the Administrative Trustees, and the Depositor,
acting singly or together, (and, in the case of (iv) below,
Robert J. Reger, Jr., as authorized representative of the Trust)
(i) to prepare and file with the Securities and Exchange Commis-
sion (the "Commission") and execute, in each case on behalf of
the Trust, (a) a Registration Statement on Form S-3 (the "1933
Act Registration Statement"), including any pre-effective or
post-effective amendments to the 1933 Act Registration Statement,
relating to the registration under the Securities Act of 1933, as
amended, of the Preferred Securities of the Trust and certain
other securities and (b) a Registration Statement on Form 8-A
(the "1934 Act Registration Statement") (including all pre-
effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under
Section 12(b) of the Securities Exchange Act of 1934, as amended;
(ii) to prepare and file with the New York Stock Exchange (the
"Exchange") and execute on behalf of the Trust a listing applica-
tion and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desir-
able to cause the Preferred Securities to be listed on the
Exchange, (iii) to prepare and file and execute on behalf of the
Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and
other papers and documents as shall be necessary or desirable to
register the Preferred Securities under the securities or blue
sky laws of such jurisdictions as the Depositor or the
Administrative Trustee, on behalf of the Trust, may deem
necessary or desirable and (iv) to execute and deliver, on
behalf of the Trust, an underwriting agreement in respect
of the sale of the Preferred Securities in such form as
the Depositor shall approve. In the event that any filing
referred to above is required by the rules and regulations of the
Commission, the Exchange or state securities or blue sky laws, to
be executed on behalf of the Trust by one or more of the Trust-
ees, each of the Trustees, in its or his capacity as Trustee of
the Trust, is hereby authorized and, to the extent so required,
directed to join in any such filing and to execute on behalf of
the Trust any and all of the foregoing, it being understood that
The Bank of New York and The Bank of New York (Delaware), in
their capacities as Trustees of the Trust, respectively, shall
not be required to join in any such filing or execute on behalf
of the Trust any such document unless required by the rules and
regulations of the Commission, the Exchange or state securities
or blue sky laws. In connection the filings referred to above,
the Depositor and each Trustee, solely in its or his capacity as
Trustee of the Trust, hereby constitutes and appoints Robert A.
Wooldridge, James H. Scott and Robert J. Reger, Jr., and each of
them, as its or his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the
Depositor or such Trustee or in the Depositor's or such Trustee's
name, place and stead, in any and all capacities, to sign any and
all filings and amendments (including post-effective amendments)
to any of such filings (including the 1933 Act Registration
Statement and the 1934 Act Registration Statement) and to file
the same, with all exhibits thereto and other documents in
connection therewith, with the Commission, the Exchange and
securities or blue sky administrators, granting unto said attor-
neys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in connection therewith, as fully to all intents and
purposes as the Depositor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their respective substitute
or substitutes, shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or
more counterparts.
6. The number of Trustees initially shall be three
(3) and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed
by the Depositor which may increase or decrease the number of
Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware, or, if not a natural
person, an entity which has its principal place of business in
the State of Delaware and otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor
is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty days prior written
notice to Depositor.
7. The Depositor shall have the right to terminate
the Trust at any time prior to the issuance of any Preferred
Security. Upon termination of the Trust in connection with this
Section 7, each of the Administrative Trustees, acting singly, is
hereby authorized to prepare, execute and file a Certificate of
Cancellation with the Secretary of State of the State of Dela-
ware.
8. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed as of the day and year first
above written.
TEXAS UTILITIES ELECTRIC COMPANY,
as Depositor
By: /s/ Robert S. Shapard
----------------------------------
Name: Robert S. Shapard
Title: Treasurer and Assistant
Secretary
THE BANK OF NEW YORK, not in its
individual capacity but solely
as Trustee
By: /s/ Stephen J. Giurlando
----------------------------------
Name: Stephen J. Giurlando
Title: Assistant Vice President
THE BANK OF NEW YORK,
(DELAWARE), not in its
individual capacity but
solely as Trustee
By: /s/ Joseph G. Ernst
----------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
WAYNE E. PATTERSON, not in his
individual capacity but solely
as Trustee
By: /s/ Wayne E. Paterson
----------------------------------
Exhibit 3(d)
TRUST AGREEMENT
OF TU ELECTRIC CAPITAL V
This TRUST AGREEMENT of TU Electric Capital V (the
"Trust"), dated as of January 8, 1997, among (i) Texas Utilities
Electric Company, a Texas corporation (the "Depositor"), (ii) The
Bank of New York, a New York banking corporation, not in its
individual capacity but solely as trustee of the Trust, (iii) The
Bank of New York (Delaware), a Delaware banking corporation, not
in its individual capacity but solely as trustee of the Trust,
and (iv) Wayne E. Patterson, an individual employed by the
Depositor, not in his individual capacity but solely as trustee
of the Trust (the "Administrative Trustee")(the Administrative
Trustee, together with any administrative trustees appointed by
the Depositor after the date hereof, the "Administrative Trust-
ees")(each of such trustees in (ii), (iii) and (iv) a "Trustee"
and collectively, the "Trustees"). The Depositor and the Trust-
ees hereby agree as follows:
1. The trust created hereby shall be known as "TU
Electric Capital V", in which name the Trustees, or the Depositor
to the extent provided herein, may conduct the business of the
Trust , make and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801 et seq. (the "Business Trust Act"), and
------- -- ---
that this document constitutes the governing instrument of the
Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Secretary of
State of the State of Delaware in accordance with the provisions
of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Trust Agreement, satisfactory to each such
party and substantially in the form to be included as an exhibit
to the 1933 Act Registration Statement referred to below, to
provide for the contemplated operation of the Trust created
hereby and the issuance of the Capital Securities and Common
Securities referred to therein. Prior to the execution and
delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with
respect of the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals
required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize
and direct each of the Administrative Trustees, and the Depositor,
acting singly or together, (and, in the case of (iv) below,
Robert J. Reger, Jr., as authorized representative of the Trust)
(i) to prepare and file with the Securities and Exchange Commis-
sion (the "Commission") and execute, in each case on behalf of
the Trust, (a) a Registration Statement on Form S-3 (the "1933
Act Registration Statement"), including any pre-effective or
post-effective amendments to the 1933 Act Registration Statement,
relating to the registration under the Securities Act of 1933, as
amended, of the Capital Securities of the Trust and certain other
securities and (b) a Registration Statement on Form 8-A (the
"1934 Act Registration Statement") (including all pre-effective
and post-effective amendments thereto) relating to the registra-
tion of the Capital Securities of the Trust under Section 12(b)
of the Securities Exchange Act of 1934, as amended; (ii) to
prepare and file with the New York Stock Exchange (the "Ex-
change") and execute on behalf of the Trust a listing application
and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause
the Capital Securities to be listed on the Exchange, (iii) to
prepare and file and execute on behalf of the Trust such applica-
tions, reports, surety bonds, irrevocable consents, appointments
of attorney for service of process and other papers and documents
as shall be necessary or desirable to register the Capital
Securities under the securities or blue sky laws of such juris-
dictions as the Depositor or the Administrative Trustee, on
behalf of the Trust, may deem necessary or desirable and
(iv) to execute and deliver, on behalf of the Trust, an
underwriting agreement in respect of the sale of the Capital
Securities in such form as the Depositor shall approve.
In the event that any filing referred to above is
required by the rules and regulations of the Commission, the
Exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by one or more of the Trustees, each of the
Trustees, in its or his capacity as Trustee of the Trust, is
hereby authorized and, to the extent so required, directed to
join in any such filing and to execute on behalf of the Trust any
and all of the foregoing, it being understood that The Bank of
New York and The Bank of New York (Delaware), in their capacities
as Trustees of the Trust, respectively, shall not be required to
join in any such filing or execute on behalf of the Trust any
such document unless required by the rules and regulations of the
Commission, the Exchange or state securities or blue sky laws.
In connection the filings referred to above, the Depositor and
each Trustee, solely in its or his capacity as Trustee of the
Trust, hereby constitutes and appoints Robert A. Wooldridge,
James H. Scott and Robert J. Reger, Jr., and each of them, as its
or his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for the Depositor or
such Trustee or in the Depositor's or such Trustee's name, place
and stead, in any and all capacities, to sign any and all filings
and amendments (including post-effective amendments) to any of
such filings (including the 1933 Act Registration Statement and
the 1934 Act Registration Statement) and to file the same, with
all exhibits thereto and other documents in connection therewith,
with the Commission, the Exchange and securities or blue sky
administrators, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Depositor or such
Trustee might or could do in person, hereby ratifying and con-
firming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or
more counterparts.
6. The number of Trustees initially shall be three
(3) and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed
by the Depositor which may increase or decrease the number of
Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware, or, if not a natural
person, an entity which has its principal place of business in
the State of Delaware and otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor
is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty days prior written
notice to Depositor.
7. The Depositor shall have the right to terminate
the Trust at any time prior to the issuance of any Capital
Security. Upon termination of the Trust in connection with this
Section 7, each of the Administrative Trustees, acting singly, is
hereby authorized to prepare, execute and file a Certificate of
Cancellation with the Secretary of State of the State of Dela-
ware.
8. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed as of the day and year first
above written.
TEXAS UTILITIES ELECTRIC COMPANY,
as Depositor
By: /s/ Robert S. Shapard
--------------------------------------
Name: Robert S. Shapard
Title: Treasurer and Assistant
Secretary
THE BANK OF NEW YORK, not in its
individual capacity but solely
as Trustee
By: /s/ Stephen J. Giurlando
--------------------------------------
Name: Stephen J. Giurlando
Title: Assistant Vice President
THE BANK OF NEW YORK,
(DELAWARE), not in its
individual capacity but
solely as Trustee
By: /s/ Joseph G. Ernst
--------------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
WAYNE E. PATTERSON, not in his
individual capacity but solely
as Trustee
By: /s/ Wayne E. Patterson
--------------------------------------
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),
,
,
,
and
Wayne Patterson, as Trustees
Dated as of , 1997
TU ELECTRIC CAPITAL
=========================================================================
<PAGE>
TU ELECTRIC CAPITAL
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 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 . . . . . . . . . . . . . 12
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 . . . . . . . . . . . . . . . . . . . 17
Section 4.02. Redemption . . . . . . . . . . . . . . . . . . . . 18
Section 4.03. Subordination of Common Securities . . . . . . . . 20
Section 4.04. Payment Procedures . . . . . . . . . . . . . . . . 20
Section 4.05. Tax Returns and Reports . . . . . . . . . . . . . . 20
Section 4.06. Payments under Indenture . . . . . . . . . . . . . 21
ARTICLE V.
Trust Securities Certificates
Section 5.01. Initial Ownership . . . . . . . . . . . . . . . . . 21
Section 5.02. The Trust Securities Certificates . . . . . . . . . 21
Section 5.03. Execution and Delivery of Trust Securities
Certificates . . . . . . . . . . . . . . . . . . 22
Section 5.04. Registration of Transfer and Exchange of
Securities Certificates . . . . . . . . . . . . . 22
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates . . . . . . . . . . . . . 23
Section 5.06. Persons Deemed Securityholders . . . . . . . . . . 23
Section 5.07. Access to List of Securityholders' Names and
Addresses . . . . . . . . . . . . . . . . . . . . 23
Section 5.08. Maintenance of Office or Agency . . . . . . . . . . 24
Section 5.09. Appointment of Paying Agent . . . . . . . . . . . . 24
Section 5.10. Ownership of Common Securities by Depositor . . . . 25
Section 5.11. Definitive Securities Certificates . . . . . . . . 25
Section 5.12. Book-Entry System . . . . . . . . . . . . . . . . . 25
Section 5.13. Rights of Securityholders . . . . . . . . . . . . . 26
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights . . . . . . . . . . . 26
Section 6.02. Notice of Meetings . . . . . . . . . . . . . . . . 28
Section 6.03. Meetings of Holders of Securities . . . . . . . . . 28
Section 6.04. Voting Rights . . . . . . . . . . . . . . . . . . . 28
Section 6.05. Proxies, etc. . . . . . . . . . . . . . . . . . . . 28
Section 6.06. Securityholder Action by Written Consent . . . . . 29
Section 6.07. Record Date for Voting and Other Purposes . . . . . 29
Section 6.08. Acts of Securityholders . . . . . . . . . . . . . . 29
Section 6.09. Inspection of Records . . . . . . . . . . . . . . . 30
ARTICLE VII.
Representations and Warranties of the Property
Trustee and the Delaware Trustee
Section 7.01. Property Trustee . . . . . . . . . . . . . . . . . 30
Section 7.02. Delaware Trustee . . . . . . . . . . . . . . . . . 31
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and Responsibilities . . . . . . . . 32
Section 8.02. Notice of Defaults . . . . . . . . . . . . . . . . 33
Section 8.03. Certain Rights of Property Trustee . . . . . . . . 33
Section 8.04. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . 36
Section 8.05. May Hold Securities . . . . . . . . . . . . . . . . 36
Section 8.06. Compensation; Fees; Indemnity . . . . . . . . . . . 37
Section 8.07. Certain Trustees Required; Eligibility . . . . . . 37
Section 8.08. Conflicting Interests . . . . . . . . . . . . . . . 38
Section 8.09. Co-Trustees and Separate Trustee . . . . . . . . . 38
Section 8.10. Resignation and Removal; Appointment of Successor . 39
Section 8.11. Acceptance of Appointment by Successor . . . . . . 41
Section 8.12. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . 41
Section 8.13. Preferential Collection of Claims Against
Depositor or Trust . . . . . . . . . . . . . . . 42
Section 8.14. Reports by Property Trustee . . . . . . . . . . . . 42
Section 8.15. Reports to the Property Trustee . . . . . . . . . . 42
Section 8.16. Evidence of Compliance With Conditions Precedent . 42
Section 8.17. Number of Trustees. . . . . . . . . . . . . . . . . 42
Section 8.18. Delegation of Power. . . . . . . . . . . . . . . . 43
Section 8.19. Fiduciary Duty . . . . . . . . . . . . . . . . . . 43
ARTICLE IX.
Termination and Liquidation
Section 9.01. Termination Upon Expiration Date . . . . . . . . . 44
Section 9.02. Early Termination . . . . . . . . . . . . . . . . . 44
Section 9.03. Termination . . . . . . . . . . . . . . . . . . . . 45
Section 9.04. Liquidation . . . . . . . . . . . . . . . . . . . . 45
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Guarantee by the Depositor and
Assumption of Obligations . . . . . . . . . . . 48
Section 10.02. Limitation of Rights of Securityholders . . . . . 48
Section 10.03. Amendment . . . . . . . . . . . . . . . . . . . . 48
Section 10.04. Separability . . . . . . . . . . . . . . . . . . . 49
Section 10.05. Governing Law . . . . . . . . . . . . . . . . . . 50
Section 10.06. Successors . . . . . . . . . . . . . . . . . . . . 50
Section 10.07. Headings . . . . . . . . . . . . . . . . . . . . . 50
Section 10.08. Notice and Demand . . . . . . . . . . . . . . . . 50
Section 10.09. Agreement Not to Petition . . . . . . . . . . . . 51
Section 10.10. Conflict with Trust Indenture Act . . . . . . . . 51
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of ,
1997, 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)
and Wayne Patterson, each an individual, and 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 January 8, 1997 (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 January 8,
1997, 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 Securities by the Trust and (iv) the
appointment of additional Administrative Trustees of the Trust;
NOW THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, each party, for the benefit of
the other party and for the benefit of the Securityholders, hereby amends
and restates the Original Trust Agreement in its entirety and agrees as
follows:
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 created
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, liqui-
dator, 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 Exchange Act. 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 $ 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.
"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, and its permitted successors and assigns as
such trustees.
"Debentures" means the $ aggregate principal amount of
the Depositor's % Junior Subordinated Debentures, Series , issued
pursuant to the Subordinated Indenture which will mature on , 20 , or
such earlier date, not earlier than , 2017, as may be elected by the
Company.
"Definitive Securities Certificates" means
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.
"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 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 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 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 $ 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).
"Offer" has the meaning specified in Section 2.07(c).
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary, of the Depositor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate
given pursuant to Section 8.16 shall be the principal executive, financial
or accounting officer of the Depositor. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in
this Trust Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Trust, the Property Trustee, the Delaware Trustee or the
Depositor, but not an employee of the Trust, the Property Trustee, the
Delaware Trustee or the Depositor, and who shall be reasonably acceptable
to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding," when used with respect to
Securities, means, as of the date of determination, all
Securities theretofore delivered under this Trust Agreement, except:
(i) Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative
Trustees for cancellation;
(ii) 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
Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(iii) Securities in exchange for or in lieu of
which other 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 Securities have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, 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
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 Securities are owned by the Depositor, one or
more of the Trustees and/or any such Affiliate. 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
Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a
Securities Certificate as reflected in the records of the Securities
Depository or, if a Securities Depository participant is not the beneficial
owner, then as reflected in the records of a Person maintaining an account
with such Securities Depository (directly or indirectly), in accordance
with the rules of such Securities Depository.
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 and shall initially be Texas Utilities
Services Inc.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with The Chase
Manhattan Bank, or such other banking institution as the Depositor shall
select 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 Paying Agent, pursuant to Section 5.09, shall make payments to
the Securityholders in accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
" Security" means a security
representing an undivided beneficial interest in the assets of the Trust
having a Liquidation Amount of $ and having rights provided therefor in
this Trust Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
" Securities Certificate" means a certificate
evidencing ownership of 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(d).
"Relevant Trustee" shall have the meaning specified in Section
8.10.
"Responsible Officer," when used with respect to the Property
Trustee means an officer of the Property Trustee assigned by the Property
Trustee to administer its corporate trust matters.
"Securities Depository" shall have the meaning specified in
Section 5.12.
"Securities Register" shall mean the Securities Register as
described in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such
Person shall be a beneficial owner of such security within the meaning of
the Delaware Business Trust Act.
"Subordinated Indenture" means the Indenture, dated as of
December 1, 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 time or manner in which such amendment, clarification
or change is introduced or made known, which amendment, clarification, or
change is effective, which Administrative Action is taken or which judicial
decision is issued, in each case on or after the date of issuance of the
Securities, there is more than an insubstantial risk that (i) the
Trust is, or will be, subject to United States federal income tax with
respect to interest received on the Debentures, (ii) interest payable by
the Depositor on the Debentures is not, or will not be, fully deductible by
the Depositor for United States federal income tax purposes, or (iii) the
Trust is, or will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Transfer Agent and Registrar" shall mean the transfer agent and
registrar for the Securities appointed by the Trust and shall be
initially Texas Utilities Services Inc.
"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
Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated
as of , 1997, among the Trust, the Depositor and the
underwriters named therein.
ARTICLE II.
ESTABLISHMENT OF THE TRUST
SECTION 2.01. NAME. The Trust created hereby shall be known as
"TU Electric Capital ", 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 SECURITIES. On
, 1997 the Depositor and an Administrative Trustee, on behalf of the
Trust, both executed and delivered the Underwriting Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement,
one of the Administrative Trustees, on behalf of the Trust in accordance
with Section 5.02, executed and delivered a Securities
Certificate, registered in the name of the nominee of The Depositary Trust
Company, having an aggregate Liquidation Amount of $ ,000,000.
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 subscribe to and purchase from the Depositor Debentures,
registered in the name of the Property Trustee and having an aggregate
principal amount equal to $ , and, in satisfaction of the
purchase price for such Debentures, (x) one of the Administrative Trustees,
on behalf of the Trust, shall execute and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of Common Securities having an aggregate
Liquidation Amount of $ , and (y) the Property Trustee, on behalf
of the Trust, shall deliver to the Depositor the sum of $ representing
the proceeds from the sale of the Securities pursuant to the
Underwriting Agreement.
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 and invest the proceeds thereof in
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.
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Article VIII and in accordance with the
following provisions (A) and (B), the Trustees shall have the authority to
enter into all transactions and agreements determined by the Trustees to be
appropriate in exercising the authority, express or implied, otherwise
granted to the Trustees under this Trust Agreement, and to perform all acts
in furtherance thereof, including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees, acting singly
or together, shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(i) the issuance and sale of the Trust Securities;
(ii) without the consent of any Person, to cause the Trust to
enter into and to execute, deliver and perform on behalf of the
Trust, the Expense Agreement, and such agreements as may be
necessary or desirable in connection with the consummation of the
Underwriting Agreement (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 registration of the Securities under the
Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a
trust indenture under the Trust Indenture Act;
(vi) the listing of the Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the 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;
(vii) the appointment of a Paying Agent and Transfer Agent and
Registrar in accordance with this Trust Agreement;
(viii) registering transfers of the Trust Securities in
accordance with this Trust Agreement;
(ix) 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
(x) the taking of any action incidental to the foregoing as
the Administrative Trustees may from time to time determine is
necessary or advisable to protect and conserve the Trust Property
for the benefit of the Securityholders (without consideration of
the effect of any such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following ministerial matters:
(i) the establishment of the Payment Account;
(ii) the receipt of the Debentures;
(iii) the deposit of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(iv) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities in accordance with the terms of
this Trust Agreement;
(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 ministerial action incidental to the
foregoing as the Property Trustee may from time to time determine
is necessary or advisable to protect and conserve the Trust
Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
Subject to this Section 2.07(a)(B), the Property Trustee shall
have none of the duties, powers or authority of the Administrative Trustees
set forth in Sections 2.07(a)(A) and 2.07(c) or the Depositor set forth in
Section 2.07(c). The Property Trustee shall have the power and authority
to exercise all of the rights, powers and privileges of a holder of
Debentures under the Subordinated Indenture and, if an Event of Default
occurs and is continuing, the Property Trustee may, for the benefit of
Holders of the Trust Securities, in its discretion, proceed to protect and
enforce its rights as holder of the Debentures subject to the rights of the
Holders pursuant to the terms of this Trust Agreement.
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not (i) acquire any
investments or engage in any activities not authorized by this Trust
Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii)
take any action that would cause the Trust to fail or cease to qualify as a
"grantor trust" for United States federal income tax purposes and not as an
association taxable as a corporation, (iv) incur any indebtedness for
borrowed money or (v) take or consent to any action that would result in
the placement of a Lien on any of the Trust Property. The Trustees shall
defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue of the Securities,
the Depositor and the Administrative Trustees, acting singly or together,
(and, in the case of (v) below, Robert J. Reger, Jr., as authorized
representative of the Trust) shall have the right and responsibility to
assist the Trust with respect to, or effect on behalf of the Trust, the
following (and any actions taken by the Depositor in furtherance of the
following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):
(i) to prepare for filing by the Trust with the Commission and
to execute a registration statement on Form S-3 in relation to
the 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
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 Securities and to file or cause the
Administrative Trustees to file thereafter with such exchange or
the Nasdaq National Market such notifications and documents as
may be necessary from time to time to maintain such listing;
(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 Securities under Section 12(b)
of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), including any amendments thereto;
(v) to execute and deliver on behalf of the Trust the
Underwriting Agreement and such other agreements as may be
necessary or desirable in connection with the consummation
thereof;
(vi) to select the investment banker or bankers to act as
underwriters with respect to the offer and sale by the Trust of
Securities ("Offer") and negotiate the terms of an
Underwriting Agreement and pricing agreement providing for the
Offer;
(vii) to take any other actions necessary or desirable to carry
out any of the foregoing activities; and
(viii) to designate itself or an Affiliate to be the Transfer
Agent and 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 (as amended or restated
from time to time, the "Certificate of Trust") or this Trust Agreement,
that each of the Depositor and the Administrative Trustees determines in
its discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the
Holders of the 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 Trustee and the Paying Agent
appointed by the Administrative Trustees shall have exclusive control and
sole right of withdrawal with respect to the Payment Account for the
purpose of making deposits in and withdrawals from the Payment Account in
accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by
the Property Trustee in the Payment Account for the exclusive benefit of
the Holders of Trust Securities and for distribution as herein provided,
including (and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held
in the Payment Account shall not be invested by the Property Trustee
pending distribution thereof.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust available
for the payment of Distributions. Distributions shall accrue from the
Closing Date, and, except in the event that the Depositor exercises its
right to extend the interest payment period for the Debentures pursuant to
Section 311 of the Subordinated Indenture, shall be payable in
arrears on and of each year,
commencing on , 1997. 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 Securities will be
deferred for the period equal to the extension of the interest payment
period for the Debentures and the rate per annum at which Distributions on
the Trust Securities accumulate shall be increased by an amount such that
the aggregate amount of Distributions that accumulate on all Trust
Securities during any such extended interest payment period is equal to the
aggregate amount of interest (including, to the extent permitted by law,
interest payable on unpaid interest at the percentage rate per annum set
forth above, compounded quarterly) that accrues during any such extended
interest payment period on the Debentures. The amount of Distributions
payable for any period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and
shall be deemed payable on each Distribution Date only to the extent that
the Trust has funds available in the Payment Account for the payment of
such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities on the relevant record
date, which shall be 15 days prior to the relevant Distribution Date.
SECTION 4.02. REDEMPTION. (a) On each Debenture Redemption
Date and at the maturity date for the Debentures (as defined in the
Subordinated Indenture), the Property Trustee will be required to redeem a
Like Amount of Trust Securities at the Redemption Price plus accumulated
and unpaid Distributions to the 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 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 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 Securities Register for the Trust Securities on the relevant record
dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then on the Redemption
Date, all rights of Securityholders holding Trust Securities so called for
redemption will cease, except the right of such Securityholders to receive
the Redemption Price plus accumulated and unpaid Distributions to the date
of payment thereof, but without interest thereon, and such Trust Securities
will cease to be outstanding. In the event that any Redemption Date is not
a Business Day, then payment of the Redemption Price payable on such date
plus accumulated and unpaid Distributions to such Redemption Date shall be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay). 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 Securities. The particular
Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Property Trustee from the Outstanding
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 $ or
integral multiples thereof) of the Liquidation Amount of
Securities of a denomination larger than $ . The Property Trustee shall
promptly notify the Transfer Agent and Registrar in writing of the
Securities selected for redemption and, in the case of any
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
Securities shall relate, in the case of any
Securities redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of 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 an 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
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 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,
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 Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under this Trust
Agreement with respect to the Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on
behalf of the Holders of the Securities and not the Holder of
the Common Securities, and only the Holders of the 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
Securities shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities
Register or, if the Securities are held by a Securities
Depository, such Distributions shall be made to the Securities Depository,
which shall credit the relevant Persons' accounts at such Securities
Depository on the applicable distribution dates. Payments in respect of
the Common 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.
SECTION 4.06. PAYMENTS UNDER INDENTURE. Any amount payable
hereunder to any Holder of Securities shall be reduced by the
amount of any corresponding payment such Holder has directly received
pursuant to Section 808 of the Subordinated Indenture. Notwithstanding the
provisions hereunder to the contrary, Securityholders acknowledge that any
Holder of Securities that receives payment under Section 808
of the Subordinated Indenture may receive amounts greater than the amount
such Holder may be entitled to receive pursuant to the other provisions of
this Trust Agreement.
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.01. INITIAL OWNERSHIP. Upon the creation of the Trust
by the contribution by the Depositor pursuant to Section 2.03 and until the
issuance of the Trust Securities, and at any time during which no Trust
Securities are outstanding, the Depositor shall be the sole beneficial
owner of the Trust.
SECTION 5.02. THE TRUST SECURITIES CERTIFICATES. The Trust
Securities Certificates shall be issued in denominations of $ Liquidation
Amount and integral multiples thereof. Subject to Section 2.04 relating to
the original issuance of the Securities Certificate
registered in the name of the nominee of The Depository Trust Company, the
Trust Securities Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of at least one Administrative Trustee and,
if executed on behalf of the Trust by facsimile signature, countersigned by
the Transfer Agent and Registrar or its agent. Trust Securities
Certificates bearing the manual signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust and, if executed on behalf of the Trust by facsimile
signature, countersigned by the Transfer Agent and Registrar or its agent,
shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such
Trust Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Securityholder, and shall be entitled to the
rights and subject to the obligations of a Securityholder hereunder, upon
due registration of such Trust Securities Certificate in such transferee's
name pursuant to Section 5.04 or 5.11.
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,
and in the case of Securities executed by facsimile
signature, countersigned by the Transfer Agent and Registrar, or The Bank
of New York as its agent, and delivered to or upon the written order of the
Depositor signed by its chairman of the board, any of its vice presidents
or its Treasurer, without further corporate action by the Depositor, in
authorized denominations. The Depositor agrees to indemnify, defend and
hold The Bank of New York harmless against any and all costs and
liabilities incurred without negligence arising out of or in connection
with any such countersigning by it.
SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF
SECURITIES CERTIFICATES. The Transfer Agent and Registrar shall keep or
cause to be kept, at the office or agency maintained pursuant to Section
5.08, a Securities Register in which, subject to such reasonable
regulations as it may prescribe, the Transfer Agent and Registrar shall
provide for the registration of 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 Securities Certificates as herein provided.
Texas Utilities Services Inc. shall be the initial Transfer Agent and
Registrar.
Upon surrender for registration of transfer of any
Securities Certificate at the office or agency maintained pursuant to
Section 5.08, the Administrative Trustees, or any one of them, shall
execute on behalf of the Trust by manual or facsimile signature and, if
executed on behalf of the Trust by facsimile signature, cause the Transfer
Agent and Registrar or its agent to countersign and deliver, in the name of
the designated transferee or transferees, one or more new
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount. At the option of a Holder, Securities
Certificates may be exchanged for other Securities
Certificates in authorized denominations of the same class and of a like
aggregate Liquidation Amount upon surrender of the Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.08.
Every Securities Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied
by a written instrument of transfer in form satisfactory to the
Administrative Trustees and the Transfer Agent and Registrar duly executed
by the Holder or such Holder's attorney duly authorized in writing. Each
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 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 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 Securities so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Securities being redeemed in part.
No service charge shall be made for any registration of transfer
or exchange of Securities Certificates, but the Transfer
Agent and Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer or exchange of Securities Certificates.
SECTION 5.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES. If (a) any mutilated Trust Securities Certificate
shall be surrendered to the Transfer Agent and Registrar, or if the
Transfer Agent and Registrar shall receive evidence to its satisfaction of
the destruction, loss or theft of any Trust Securities Certificate and
(b) there shall be delivered to the Transfer Agent and Registrar and the
Administrative Trustees such security or indemnity as may be required by
them to save each of them and the Depositor harmless, then in the absence
of notice that such Trust Securities Certificate shall have been acquired
by a bona fide purchaser, the Administrative Trustees, or any one of them,
on behalf of the Trust shall execute by manual or facsimile signature and,
if execution on behalf of the Trust is by facsimile signature,
countersigned by a Transfer Agent and Registrar or its agent; and the
Administrative Trustees, or any one of them, and, if executed on behalf of
the Trust by facsimile signature, countersigned by the Transfer Agent and
Registrar or its agent shall make available for delivery, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of like class,
tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section, the Administrative Trustees or
the Transfer Agent and Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive
evidence of an ownership interest in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Trust Securities Certificate
shall be found at any time.
SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due
presentation of a Trust Securities Certificate for registration of
transfer, the Trustees and the Transfer Agent and Registrar 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 Transfer
Agent and Registrar shall be bound by any notice to the contrary.
SECTION 5.07. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES. The Administrative Trustees shall furnish or cause to be
furnished (x) to the Depositor, within 15 days after receipt by any
Administrative Trustee of a request therefor from the Depositor in writing
and (y) to the Property Trustee, promptly after receipt by any
Administrative Trustee of a request therefor from the Property Trustee in
writing in order to enable the Property Trustee to discharge its
obligations under this Trust Agreement, a list, in such form as the
Depositor or the Property Trustee may reasonably require, of the names and
addresses of the Securityholders as of 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 Depositor
shall or shall cause the Transfer Agent and Registrar to maintain in the
Borough of Manhattan, The City of New York, an office or offices or agency
or agencies where Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to
or upon the Depositor or the Transfer Agent and Registrar in respect of the
Trust Securities Certificates may be served. The Depositor initially
designates Midwest Clearing Corporation, 40 Broad Street, New York, New
York 10004 at its principal corporate trust office for such purposes. The
Depositor shall or shall cause the Transfer Agent and Registrar to give
prompt written notice to the Depositor, the Property Trustee and to the
Securityholders of any change in the location of the Securities Register or
any such office or agency.
SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying Agent
shall make distributions to Securityholders from the Payment Account and
shall report the amounts of such distributions to the Administrative
Trustees and the Property Trustee. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions referred to above. The Property Trustee shall
be entitled to rely upon a certificate of the Paying Agent stating in
effect the amount of such funds so to be withdrawn and that same are to be
applied by the Paying Agent in accordance with this Section 5.09. The
Administrative Trustees or any one of them may revoke such power and remove
the Paying Agent if the Administrative Trustee or any one of them
determines in its sole discretion that the Paying Agent shall have failed
to perform its obligations under this Trust Agreement in any material
respect. The Paying Agent shall initially be 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 of the removal or resignation of
Texas Utilities Services, Inc. as Paying Agent, the Administrative Trustees
shall appoint a successor that is reasonably acceptable to the Property
Trustee and the Depositor to act as Paying Agent (which shall be a bank,
trust company or an Affiliate of the Depositor). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying
Agent appointed by the Administrative Trustees to execute and deliver to
the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent,
such successor Paying Agent or additional Paying Agent will hold all sums,
if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be
paid to such Securityholders. The Paying Agent shall return all unclaimed
funds to the Property Trustee and upon resignation or removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall
apply to the Paying Agent appointed hereunder, and the Paying Agent shall
be bound by the requirements with respect to paying agents of securities
issued pursuant to the Trust Indenture Act. Any reference in this Trust
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 5.10. OWNERSHIP OF COMMON 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 SECURITIES CERTIFICATES.
Upon initial issuance of the Securities, the Definitive
Securities Certificates shall be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustees, as evidenced by the execution thereof by
the Administrative Trustees, or any one of them. The Administrative
Trustees, or any one of them, shall execute on behalf of the Trust by
manual or facsimile signature, and, if executed by facsimile on behalf of
the Trust, countersigned by the Transfer Agent or its agent, the Definitive
Securities Certificates initially in accordance with the
instructions of the Depositor. Neither the Transfer Agent and Registrar
nor any of the Administrative Trustees shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions.
SECTION 5.12. BOOK-ENTRY SYSTEM. Some or all of the
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
Securities, in which case the Owners of such Securities will
not receive physical delivery of certificates for Securities.
Except as provided herein, all transfers of beneficial ownership interests
in such Securities will be made by book-entry only, and no
investor or other party purchasing, selling or otherwise transferring
beneficial ownership of the Securities will receive, hold or
deliver any certificate for Securities. The Depositor, the
Trustees and the Paying Agent will recognize the Securities Depository or
its nominee as the Holder of 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 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 Securities
with respect to required notices and other provisions of the letter of
representations or agreement executed with respect to such
Securities.
Whenever the beneficial ownership of any Securities
is determined through the books of a Securities Depository, the
requirements in this Trust Agreement of holding, delivering or transferring
such Securities shall be deemed modified with respect to such
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 Securities shall, while such 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
Securities shall have no preemptive or similar rights and when
issued and delivered to Securityholders against payment of the purchase
price therefor will be fully paid and nonassessable undivided beneficial
interests in the assets of the Trust.
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 Securities shall have any right to vote
or in any manner otherwise control the administration, operation and
management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust
Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
If the Property Trustee fails to enforce its rights under the Debentures or
this Trust Agreement, a Holder of Securities may institute a
legal proceeding directly against the Depositor to enforce the Property
Trustee's rights under the Debentures or this Trust Agreement, to the
fullest extent permitted by law, without first instituting any legal
proceeding against the Property Trustee or any other person.
Notwithstanding the foregoing, a Holder of Securities may
directly institute a proceeding for enforcement of payment to such Holder
of principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation preference amount of the
Securities of such Holder on or after the due dates specified in the
Debentures.
(b) So long as any Debentures are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Debenture Trustee with
respect to such Debentures, (ii) waive any past default which is waivable
under Section 813 of the Subordinated Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Subordinated Indenture or the Debentures, where such
consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least 66 2/3% of the aggregate Liquidation
Amount of the Outstanding 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
Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Securities, except
pursuant to a subsequent vote of the Securities. The
Property Trustee shall notify all Holders of the 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 Securities, prior to taking any of the
foregoing actions, the Property Trustee shall, at the expense of the
Depositor, obtain an Opinion of Counsel experienced in such matters to the
effect that the Trust will be classified as a "grantor trust" and not as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that would
materially adversely affect the powers, preferences or special rights of
the 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 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
Securities. No amendment to this Trust Agreement may be made if, as a
result of such amendment, the Trust would not be classified as a "grantor
trust" but an association taxable as a corporation for United States
federal income tax purposes.
SECTION 6.02. NOTICE OF MEETINGS. Notice of all meetings of the
Holders of 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 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 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 Securities (based upon their aggregate
Liquidation Amount) and may, at any time in their discretion, call a
meeting of Holders of Securities to vote on any matters as to
which the Holders of Securities are entitled to vote.
Holders of 50% of the then Outstanding 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 Securities present, in person or by proxy, holding
more than the lesser of (x) 66 2/3% of the then Outstanding
Securities (based upon their aggregate Liquidation Amount) held by the
Holders of then Outstanding Securities present, either in
person or by proxy, at such meeting and (y) 50% of the Outstanding
Securities (based upon their aggregate Liquidation Amount) shall
constitute the action of the Securityholders, unless this Trust Agreement
requires a greater number of affirmative votes.
SECTION 6.04. VOTING RIGHTS. Securityholders shall be entitled
to one vote for each $ of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote.
SECTION 6.05. PROXIES, ETC. At any meeting of Securityholders,
any Securityholder entitled to vote thereat may vote by proxy, provided
that no proxy shall be voted at any meeting unless it shall have been
placed on file with the Administrative Trustees, or with such other officer
or agent of the Trust as the Administrative Trustees may direct, for
verification prior to the time at which such vote shall be taken. Only
Securityholders of record shall be entitled to vote. When Trust Securities
are held jointly by several Persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if
more than one of them shall be present at such meeting in person or by
proxy, and such joint owners or their proxies so present disagree as to any
vote to be cast, such vote shall not be received in respect of such Trust
Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, or, if earlier, until eleven months after it is sent and the
burden of proving invalidity shall rest on the challenger.
SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any
action which may be taken by Securityholders at a meeting may be taken
without a meeting 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 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 or among the Securityholders
and the Administrative Trustees with respect to the authenticity, validity
or binding nature of any request, demand, authorization, direction,
consent, waiver or other Act of such Securityholder or Trustee under this
Article VI, then the determination of such matter by the Property Trustee
shall be conclusive with respect to such matter.
SECTION 6.09. INSPECTION OF RECORDS. Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to
the Administrative Trustees and the Property Trustee, the other records of
the Trust shall be open to inspection by Securityholders during normal
business hours for any purpose reasonably related to such Securityholder's
interest as a Securityholder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF THE PROPERTY
TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee hereby
represents and warrants for the benefit of the Depositor and the
Securityholders that:
(a) the Property Trustee is a banking corporation or trust
company duly 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 or New York law governing the banking
or trust powers of the Property Trustee.
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 or Delaware law governing the banking
or trust powers of the Delaware Trustee.
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, exculpations and
limitations on liability afforded to the Property Trustee under the
provisions of the Trust Indenture Act and, to the extent applicable, Rule
3a-7 under the Investment Company Act of 1940, as amended, 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, to the extent applicaable, Rule 3a-7
under the Investment Company Act of 1940, as amended, or any
successor rule thereunder;
(ii) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or
sufficiency of the Trust Property or the payment of any taxes or
assessments levied thereon or in connection therewith;
(iii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with
the Depositor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account 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 ninety (90) days after
the occurrence of any 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 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 complying with such
request or direction;
(vi) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, approval, bond, debenture,
note or other evidence of indebtedness or other paper or document
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;
(xi) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
the Property Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Trust Agreement or adequate
indemnity against such risk or liability is not reasonably
assured to it;
(xii) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including
any financing or continuation statement or any tax or securities
form) (or any rerecording, refiling or registration thereof);
(xiii) the Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction; and
(xiv) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request
instructions from the Holders of the Trust Securities, which
instructions may only be given by the Holders of the same
proportion of 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 or as to the title of the Trust
thereto or as to the security afforded thereby or hereby, or as to the
validity or genuineness of any securities at any time pledged and deposited
with any Trustees hereunder, nor as to the validity or sufficiency of this
Trust Agreement or the Trust Securities. The Trustees shall not be
accountable for the use or application by the Trust of the proceeds of the
Trust Securities in accordance with Section 2.05.
SECTION 8.05. MAY HOLD SECURITIES. 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, except as provided
in the definition of the term "Outstanding" in Article I, may otherwise
deal with the Trust with the same rights it would have if it were not a
Trustee or such 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 Trust Agreement. 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 by giving written
notice thereof to the Securityholders. If the instrument of acceptance by
a successor Relevant Trustee required by Section 8.11 shall not have been
delivered to the resigning Relevant Trustee within 30 days after the giving
of such notice of resignation, the resigning Relevant Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by Act of the
Common Securityholder. If a Debenture Event of Default shall have occurred
and be continuing, the Relevant Trustee may be removed at such time by Act
of the Securityholders of a majority of the aggregate Liquidation Amount of
the Outstanding Securities, 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
Debenture 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, and the retiring Relevant Trustee shall comply with
the applicable requirements of Section 8.11. If the Relevant Trustee shall
resign, be removed or become incapable of continuing to act as the Relevant
Trustee at a time when a Debenture Event of Default shall have occurred and
be continuing, the Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the Outstanding
Securities delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and the Relevant
Trustee shall comply with the applicable requirements of Section 8.11. If
no successor Relevant Trustee shall have been so appointed by the Common
Securityholders or the Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder who
has been a Securityholder of Trust Securities for at least six months may,
on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Relevant
Trustee.
The retiring Relevant Trustee shall give notice of each
resignation and each removal of the Relevant Trustee and each appointment
of a successor Trustee 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 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 requirements for Administrative Trustees or
Delaware Trustee, as the case may be, set forth in Section 8.07).
Additionally, notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event the Depositor reasonably believes that any
Administrative Trustee who is a natural person has become incompetent or
incapacitated, the Depositor, by notice to the remaining Trustees, may
terminate the status of such Person as an Administrative Trustee (in which
case the vacancy so created will be filled in accordance with the preceding
sentence).
No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any successor Property Trustee or Delaware
Trustee.
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case
of the appointment hereunder of a successor Relevant Trustee, the retiring
Relevant Trustee and each successor Trustee shall execute and deliver an
amendment hereto wherein each successor Relevant Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Relevant Trustee all the rights, powers, trusts and duties of the
retiring Relevant Trustee and (2) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Relevant Trustee, it being understood that nothing herein or in such
amendment shall constitute such Relevant Trustees co-trustees of the same
trust and that each such Relevant Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Relevant Trustee and upon the execution and
delivery of such amendment the resignation or removal of the retiring
Relevant Trustee shall become effective to the extent provided therein and
each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on request of the Trust or
any successor Relevant Trustee such retiring Relevant Trustee shall duly
assign, transfer and deliver to such successor Trustee all Trust Property,
all proceeds thereof and money held by such retiring Relevant Trustee
hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the retiring
Relevant Trustee shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant Trustee all
such rights, powers and trusts referred to in the first or second preceding
paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless
at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Article VIII.
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any Person into which the Property Trustee or the Delaware
Trustee or any Administrative Trustee or any Trustee that is not a natural
person may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which
such Relevant Trustee shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of such Relevant Trustee,
shall be the successor of such Relevant Trustee hereunder, provided such
Person shall be otherwise qualified and eligible under this Article VIII,
without the execution or filing of any paper, the giving of any notice or
any further act on the part of any of the parties hereto.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
DEPOSITOR OR TRUST. If and when the Property Trustee shall be or become a
creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of
claims against the Depositor or Trust (or any such other obligor).
SECTION 8.14. REPORTS BY PROPERTY TRUSTEE. (a) the Property
Trustee shall transmit to Securityholders such reports concerning the
Property Trustee and its actions under this Trust Agreement as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. Such of those reports as are required to be
transmitted by the Property Trustee pursuant to Section 313(a) of the Trust
Indenture Act shall be so transmitted within 60 days after July 31 of each
year, commencing July 31, 1997.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each stock
exchange upon which the Trust Securities are listed, with the Commission
and with the Depositor. The Depositor will notify the Property Trustee
when any Trust Securities are listed on any stock exchange.
SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE. The Depositor
and the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information, if any, and the
compliance certificate required by Section 314 of the Trust Indenture Act,
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
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 Sections 2.07(a) and 2.07(c), including any registration
statement or amendment thereto filed with the Commission, or making any
other governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number the doing of such things and the
execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth
herein.
SECTION 8.19. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Trust Agreement shall not be liable to the Trust or to
any other Covered Person for its good faith reliance on the provisions of
this Trust Agreement. The provisions of this Trust Agreement, to the
extent that they restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other than the duties
imposed on the Property Trustee under the Trust Indenture Act), are agreed
by the parties hereto to replace such other duties and liabilities of such
Indemnified Person;
(b) Unless otherwise expressly provided herein and subject to
the provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any Holder of Trust
Securities, the Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering in
each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation
and the benefits and burdens relating to such interests, any
customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution,
action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Trust Agreement or
any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or
otherwise; and
(c) Unless otherwise expressly provided herein and subject to
the provisions of the Trust Indenture Act, whenever in this Trust Agreement
an Indemnified Person is permitted or required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it reasonably desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Trust
or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed
by this Trust Agreement or by applicable law.
ARTICLE IX.
TERMINATION AND LIQUIDATION
SECTION 9.01. TERMINATION UPON EXPIRATION DATE. The Trust shall
automatically terminate on December 31, 2040 (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 in respect of, or the
dissolution or liquidation of, the Depositor;
(ii) the redemption of all of the 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;
(v) the election by the Depositor to terminate the Trust and
distribute the Debentures to the Holders of Preferred Securities
in liquidation of the Trust;
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 creditors of the Trust, if any, as provided by applicable law, the Trust
shall be liquidated by the Property Trustee as expeditiously as the
Property Trustee determines to be appropriate by distributing to each
Securityholder a Like Amount of Debentures, subject to Section 9.04(e).
Notice of liquidation shall be given by the Administrative Trustees by
first-class mail, postage prepaid, mailed not later than 30 nor more than
60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be outstanding and any
Trust Securities Certificates not surrendered for exchange will
be deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or, if Section 9.04(e) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property
Trustee shall deem appropriate.
The Holder of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Securities, except
that, if a Debenture Event of Default has occurred and is continuing or if
a Debenture Event of Default has not occurred solely by reason of a
requirement that time lapse or notice be given, the
Securities shall have a priority over the Common Securities.
(b) Except where Sections 9.02(ii), 9.04(d) or 9.04(e) apply, in
order to effect the liquidation of the Trust hereunder, and any resulting
distribution of the Debentures to Securityholders, the Property Trustee
shall establish a record date for such distribution (which shall be not
more than 45 days prior to the Liquidation Date) and, either itself acting
as exchange agent or through the appointment of a separate exchange agent,
shall establish such procedures as it shall deem appropriate to effect the
distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
(c) Except where Section 9.02(ii), 9.04(d) or 9.04(e) apply,
after any Liquidation Date, (i) the Trust Securities will no longer be
deemed to be Outstanding, (ii) certificates representing a Like Amount of
Debentures will be issued to Holders of Trust Securities Certificates, upon
surrender of such Trust Securities 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 Securities Certificates until such Trust Securities
Certificates are so surrendered (and until such Trust Securities
Certificates are so surrendered, no payments or interest or principal will
be made to Holders of Trust Securities Certificates with respect to such
Debentures) and (iv) all rights of Securityholders holding Trust Securities
will cease, except the right of such Securityholders to receive Debentures
upon surrender of Trust Securities Certificates.
(d) If at any time, a Tax Event shall occur and be continuing,
the Company shall have the right to redeem the Debentures of the Fourth
Series in whole (but not in part) and thereby cause a mandatory redemption
of the Preferred Securities and Common Securities in whole (but not in
part) at the Redemption Price plus accrued within 90 days following the
occurrence of such Tax Event. Whether or not a Tax Event has occurred, the
Company has the right, at any time, to terminate and, after satisfaction of
liabilities to creditors of the Trust, if any, as provided by applicable
law, cause the Debentures of the Fourth Series to be distributed to the
holders of the Preferred Securities and Common Securities in liquidation of
the Trust.
(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 Holder of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of
Securities, except that, if a Debenture Event of Default has occurred and
is continuing or if a Debenture Event of Default has not occurred solely by
reason of a requirement that time lapse or notice be given, the
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 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, incapacity, bankruptcy, dissolution or termination of any Person
having an interest, beneficial or otherwise, in a Trust Security shall not
operate to terminate this Trust Agreement, nor 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 Sections 6.01(c) and 10.03(c), any
provision of this Trust Agreement may be amended by the Administrative
Trustees and the Depositor with (i) the consent of Holders of Trust
Securities representing not less than a majority (based upon Liquidation
Amounts) of the Outstanding Trust Securities and (ii) receipt by the
Trustees of an Opinion of Counsel to the 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
Securityholder, to such 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. 214-812-2488, with a copy to the
Secretary, facsimile no. 214-812-2488. Such notice, demand or other
communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing
or transmission.
Any notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to
or upon the Trust, the Property Trustee, the Delaware Trustee or the
Administrative Trustees shall be given in writing addressed (until another
address is published by the Trust) as follows: (i) with respect to the
Property Trustee or the Delaware Trustee, The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, 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 ". 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 estopped and precluded therefrom and such
other defenses, if any, as counsel for the Property Trustee or the Trust
may assert. The provisions of this Section 10.09 shall survive the
termination of this Trust Agreement.
SECTION 10.10. CONFLICT WITH TRUST INDENTURE ACT. (a) This
Trust Agreement is subject to the provisions of the Trust Indenture Act
that are required or deemed to be part of this Trust Agreement and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included in this
Trust Agreement by any of the provisions of the Trust Indenture Act, such
required or deemed provision shall control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the 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 E. Patterson
solely in his capacity as
Administrative Trustee
___________________________________
solely in her capacity as
Administrative
Trustee
___________________________________
solely in his capacity as
Administrative Trustee
___________________________________
solely in her capacity as
Administrative Trustee
___________________________________
solely in his capacity as
Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
TU ELECTRIC CAPITAL
THIS CERTIFICATE OF TRUST of TU Electric Capital (the
"Trust"), dated as of , 1997, 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. Section 3801, et seq.).
------- -------
1. Name. The name of the business trust being created hereby is
TU Electric Capital .
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 E. PATTERSON,
not in its individual capacity not in his individual capacity
but solely as Trustee 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
of
TU Electric Capital
Common Securities
(liquidation amount $ per Common Security)
TU Electric Capital , a statutory business trust created 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 $ 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 _______ ___, 1997, 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
_________, 199_.
TU Electric Capital
By: ____________________________________
not in his (her) individual capacity,
but solely as Administrative Trustee
<PAGE>
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of , 1997 between Texas Utilities
Electric Company, a Texas corporation ("TU Electric"), and TU Electric
Capital , 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 % Cumulative Securities (the "
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 , 1997 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 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 obligations of the Trust to pay to holders of any
Securities or other similar interests in the Trust the amounts due
such holders pursuant to the terms of the Securities or such
other similar interests, as the case may be. 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 Securities or any Beneficiary must
restore payment of any sums paid under the 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 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 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
c/o , Administrative Trustee
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
Texas Utilities Electric Company
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
Attention: Treasurer
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
<PAGE>
THIS AGREEMENT is executed as of the day and year first above
written.
TEXAS UTILITIES ELECTRIC COMPANY
By:_____________________________________
Name:
Title:
TU ELECTRIC CAPITAL
By:_____________________________________
not in his/her individual capacity, but
solely as Administrative Trustee
<PAGE>
[Clearing Agency Legend]
EXHIBIT D
Certificate Number Number of Securities
P- CUSIP NO.
Certificate Evidencing Securities
of
TU Electric Capital
% Cumulative Securities
(liquidation amount $ per Security)
TU Electric Capital , a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
____________ (the "Holder") is the registered owner of _____ (_____)
securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the TU Electric Capital %
Cumulative Securities (liquidation amount $ per
Security) (the " Securities"). The
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 Securities are set forth in, and this
certificate and the 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 ,
1997, as the same may be amended from time to time (the "Trust Agreement")
including the designation of the terms of 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
, 1997 (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.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate for and on behalf of the Trust.
Dated:
TU ELECTRIC CAPITAL
By: ____________________________
not in his (her) individual
capacity, but solely as
Administrative Trustee
Countersigned and Registered:
TEXAS UTILITIES SERVICES INC.,
Transfer Agent and Registrar
By: ____________________________
(Authorized Signature)
THE BANK OF NEW YORK, as agent for the
Transfer Agent and Registrar
By: ____________________________
(Authorized Signature)
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Security to:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert address and zip code of assignee)
of the Securities represented by this Certificate and
irrevocably appoints
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
attorney to transfer such Securities Certificate on the
books of the Trust. The attorney may substitute another to act for him
or her.
Date:__________________
Signature:________________________
(Sign exactly as your name appears on the other side of this
Securities Certificate)
Signature:________________________
(Sign exactly as your name appears on the other side of this
Securities Certificate)
Exhibit 4(c)
TEXAS UTILITIES ELECTRIC COMPANY
OFFICER'S CERTIFICATE
Robert S. Shapard, the Treasurer of Texas Utilities Electric
Company (the "Company"), pursuant to the authority granted in the
Board Resolutions of the Company dated , 1997, 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 December 1,
1995 (as amended and supplemented to date, the "Indenture") that:
1. The securities of the fourth series to be issued under
the Indenture shall be designated " % Junior
Subordinated Debentures, Series D, "(the "Debentures of
the Fourth Series"). The Debentures of the Fourth
Series are to be issued to TU Electric Capital IV, a
Delaware statutory business trust (the "Trust"). All
capitalized terms used in this certificate which are
not defined herein but are defined in the Indenture
shall have the meanings set forth in the Indenture;
2. The Debentures of the Fourth 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 Fourth Series shall mature and
the principal shall be due and payable together with
all accrued and unpaid interest thereon on ,
20 or such earlier Stated Maturity, not earlier than
, 2017, as the Company may elect. In the event the
Company elects an earlier Stated Maturity of the
Debentures of the Fourth Series, as provided herein, it
shall give notice to the Trustee and the Trustee shall
give notice to the holders of the Debentures of the
Fourth Series no less than 30 and no more than 60 days
prior to the effectiveness thereof.
4. The Debentures of the Fourth Series shall bear interest
from, and including, 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 March 31, 1997. 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. Interest on the Debentures of the Fourth
Series will accrue from, and including, the date of
original issuance and will accrue to and including the
first Interest Payment Date but if interest has been
paid on such Debentures of the Fourth Series, then
from, and excluding, the most recent Interest Payment
Date through which interest has been paid or duly
provided for to and including the next succeeding
Interest Payment Date. 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
Fourth Series shall be payable to the Person in whose
name such Debenture of the Fourth 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 Fourth Series;
provided, however, that if the Debentures of the Fourth
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 Fourth Series not punctually paid
or duly provided for shall forthwith cease to be
payable to the Holders of such Debentures of the Fourth
Series on such Regular Record Date, and may be paid to
the Persons in whose name the Debentures of the Fourth
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 Fourth
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
Fourth 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 Fourth Series shall be payable at,
and registration and registration of transfers and
exchanges in respect of the Debentures of the Fourth
Series may be effected at, the office or agency of the
Company maintained therefor in The City of New York
which unless and until changed by an Officer's
Certificate shall be the Corporate Trust Office of the
Trustee; 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 Fourth Series may be served at such
office or agency of the Company in The City of New
York. The Trustee will initially be the Security
Registrar and the Paying Agent for the Debentures of
the Fourth Series; provided, however, that the Company
reserves the right to change, by one or more Officer's
Certificates, any such office or agency;
7. The Debentures of the Fourth Series will be redeemable
on or after , 20 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 Fourth Series
being redeemed, together with 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. The
Company, however, may not redeem less than all
Outstanding Debentures of the Fourth Series unless the
conditions specified in the last paragraph of this item
are met;
The Debentures of the Fourth 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 equal to 100% of the principal
amount of the Debentures of the Fourth Series being
redeemed together with 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 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 the
legislative body, court, governmental authority or
regulatory body, irrespective of the time or manner in
which such amendment, clarification or change is
introduced or made known, which amendment,
clarification, or change is effective, which
Administrative Action is taken or which judicial
decision is issued, in each case on or after
, 1997, 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 Company on
the Debentures is not, or will not be, fully deductible
by the Company for United States federal income tax
purposes, or (iii) the Trust is, or will be, subject to
more than a de minimis amount of other taxes, duties or
other governmental charges;
The Company may not redeem less than all the Debentures
of the Fourth 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 or if
a partial redemption of Preferred Securities would
result in a delisting of such securities by any
national securities exchange on which they are then
listed;
8. So long as any Debentures of the Fourth Series are
Outstanding, the failure of the Company to pay interest
on any Debentures of the Fourth Series within 30 days
after the same becomes due and payable (whether or not
payment is prohibited by the provisions of Article
Fifteen of the Indenture) shall constitute an Event of
Default; provided, however, that a valid extension of
the interest payment period by the Company as
contemplated in Section 311 of the Indenture and
paragraph (9) of this Certificate shall not constitute
a failure to pay interest for this purpose;
9. Pursuant to Section 311 of the Indenture, the Company
shall have the right, at any time and from time to time
during the term of the Debentures of the Fourth 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 Fourth 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 Fourth Series, or make any guarantee payments
with respect to the foregoing ("Restricted Payments").
Prior to the termination of any such Extension Period,
the Company may further extend the interest payment
period, provided that such Extension Period together
with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters at any one
time or extend beyond the maturity date of the
Debentures of the Fourth Series. Any extension period
with respect to payment of interest on the Debentures
of the Fourth Series, 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. 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 or other
Holders 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 interest
payment 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;
10. At any time, the Company will have the right to
terminate the Trust and cause the Debentures of the
Fourth Series to be distributed to the holders of the
Preferred Securities in liquidation of the Trust;
11. So long as any Securities are outstanding under the
Indenture, the Company shall not make any Restricted
Payments at any time the Company is in default under
the Guarantee with respect to the Trust or is in
default with respect to payments due on any Outstanding
Securities;
12. In the event that, at any time subsequent to the
initial authenticattion and delivery of the Debentures
of the Fourth Series, the Debentures of the Fourth
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;
13. No service charge shall be made for the registration of
transfer or exchange of the Debentures of the Fourth
Series; provided, however, that the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection
with the exchange or transfer;
14. The Debentures of the Fourth 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;
15. In the event that the Debentures of the Fourth Series
are distributed to holders of Preferred Securities as a
result of the occurrence of a Tax Event or a
liquidation upon termination of the Trust, the Company
will use its best efforts to list the Debentures of the
Fourth Series on the New York Stock Exchange;
16. The undersigned has read all of the covenants and
conditions contained in the Indenture relating to the
issuance of the Debentures of the Fourth Series and the
definitions in the Indenture relating thereto and in
respect of which this certificate is made;
17. 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;
18. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to enable
the undersigned to express an informed opinion whether
or not such covenants and conditions have been complied
with; and
19. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including
any covenants compliance with which constitutes a
condition precedent) to the authentication and delivery
of the Debentures of the Fourth Series requested in the
accompanying Company Order have been complied with.
20. If the Company shall make any deposit of money and/or
Government Obligations with respect to any Debentures
of the Fourth Series, or any portion of the principal
amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's
Certificate described in clause (z) in the first
paragraph of said Section 601 unless the Company shall
also deliver to the Trustee, together with such
Officer's Certificate, either:
(A) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Debentures of the Fourth
Series, shall assume the obligation (which shall be
absolute and unconditional) to irrevocably deposit with
the Trustee or Paying Agent such additional sums of
money, if any, or additional Government Obligations
(meeting the requirements of Section 601), if any, or
any combination thereof, at such time or times, as
shall be necessary, together with the money and/or
Government Obligations theretofore so deposited, to pay
when due the principal of and premium, if any, and
interest due and to become due on such Debentures of
the Fourth Series or portions thereof, all in
accordance with and subject to the provisions of said
Section 701; provided, however, that such instrument
may state that the obligation of the Company to make
additional deposits as aforesaid shall be subject to
the delivery to the Company by the Trustee of a notice
asserting the deficiency accompanied by an opinion of
an independent public accountant of nationally
recognized standing, selected by the Trustee, showing
the calculation thereof; or
(B) an Opinion of Counsel to the effect that the
Holders of such Debentures of the Fourth Series, or
portions of the principal amount thereof, will not
recognize income, gain or loss for United States
federal income tax purposes as a result of the
satisfaction and discharge of the Company's
indebtedness in respect thereof and will be subject to
United States federal income tax on the same amounts,
at the same times and in the same manner as if such
satisfaction and discharge had not been effected.
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this day of January, 1997.
------------------------------
Robert S. Shapard,
Treasurer
<PAGE>
NO._______________
CUSIP NO.__________
EXHIBIT A
[FORM OF FACE OF JUNIOR SUBORDINATED DEBENTURE]
TEXAS UTILITIES ELECTRIC COMPANY
% JUNIOR SUBORDINATED DEBENTURES, SERIES D
TEXAS UTILITIES ELECTRIC COMPANY, a corporation duly
organized and existing under the laws of the State of Texas
(herein referred to as the "Company", which term includes any
successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to
____________________________________, or registered assigns, the
principal sum of ____________________ Dollars on , 20
, (or such earlier date as shall be established by the Company)
and, except as hereinafter provided, to pay interest on said
principal sum, from, and including, , 1997 or from,
and excluding, the most recent Interest Payment Date through
which interest has been paid or duly provided for, quarterly on
March 31, June 30, September 30 and December 31 of each year,
commencing March 31, 1997 at the rate of % per annum plus
Additional Interest, if any, until the principal hereof is paid
or made available for payment. The amount of interest payable on
any Interest Payment Date shall be computed on the basis of a
360-day year of twelve 30-day months. Interest on the Securities
of this series will accrue from, and including, , 1997
through the first Interest Payment Date, and thereafter will
accrue, from, and excluding, the last 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 the
Interest Payment Date. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date
for such interest, which shall be the 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.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
<PAGE>
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 December 1, 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 , 1997 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 , 20 as a whole or in part, at
the election of the Company, at a Redemption Price equal to 100%
of the principal amount hereof, together, in the case of any such
redemption, with accrued interest; including Additional Interest,
if any, 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 Securities of this 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 Securities of this 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 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 the legislative body, court, governmental authority or
regulatory body, irrespective of the time or manner in which such
amendment, clarification or change is introduced or made known,
which amendment, clarification, or change is effective, which
Administrative Action is taken or which judicial decision is
issued, in each case on or after , 1997, 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
Company on the Debentures is not, or will not be, fully
deductible by the Company for United States federal income tax
purposes, or (iii) the Trust is, or will be, subject to more than
a de minimis amount of other taxes, duties or other governmental
charges;
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.
So long as no Event of Default under the Indenture
shall have occurred and be continuing, 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 or pursuant to the Indenture.
The Securities of this series are issuable only in
registered form without coupons in denominations of $25.00 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.
Exhibit 4(d)
TEXAS UTILITIES ELECTRIC COMPANY
OFFICER'S CERTIFICATE
Robert S. Shapard, the Treasurer of Texas Utilities Electric
Company (the "Company"), pursuant to the authority granted in the
Board Resolutions of the Company dated , 1997, 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 December 1,
1995 (as amended and supplemented to date, the "Indenture") that:
1. The securities of the fourth series to be issued under
the Indenture shall be designated " % Junior
Subordinated Debentures, Series E, "(the "Debentures of
the Fifth Series"). The Debentures of the Fifth Series
are to be issued to TU Electric Capital V, a Delaware
statutory business trust (the "Trust"). All capitalized
terms used in this certificate which are not defined
herein but are defined in the Indenture shall have the
meanings set forth in the Indenture;
2. The Debentures of the Fifth 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 Fifth Series shall mature and the
principal shall be due and payable together with all
accrued and unpaid interest thereon on .
4. The Debentures of the Fifth Series shall bear interest
from, and including, the date of original issuance, at
the rate of % per annum payable in
arrears on
of each year (each, an "Interest Payment Date")
commencing . The amount of interest
payable for any such period will be computed on the
basis of a 360-day year of twelve 30-day months and on
the basis of the actual number of days elapsed within
any month. Interest on the Debentures of the Fifth
Series will accrue from, and including, the date of
original issuance and will accrue to and including the
first Interest Payment Date but if interest has been
paid on such Debentures of the Fifth Series, then from,
and excluding, the most recent Interest Payment Date
through which interest has been paid or duly provided
for to and including the next succeeding Interest
Payment Date. 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
Fifth Series shall be payable to the Person in whose
name such Debenture of the Fifth 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 Fifth Series;
provided, however, that if the Debentures of the Fifth
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 Fifth Series not punctually paid
or duly provided for shall forthwith cease to be
payable to the Holders of such Debentures of the Fifth
Series on such Regular Record Date, and may be paid to
the Persons in whose name the Debentures of the Fifth
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 Fifth
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
Fifth 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 Fifth Series shall be payable at, and
registration and registration of transfers and
exchanges in respect of the Debentures of the Fifth
Series may be effected at, the office or agency of the
Company maintained therefor in The City of New York
which unless and until changed by an Officer's
Certificate shall be the Corporate Trust Office of the
Trustee; 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 Fifth Series may be served at such
office or agency of the Company in The City of New
York. The Trustee will initially be the Security
Registrar and the Paying Agent for the Debentures of
the Fifth Series; provided, however, that the Company
reserves the right to change, by one or more Officer's
Certificates, any such office or agency;
7. The Debentures of the Fifth Series will be redeemable
on or after , 20 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
, 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 Fifth Series unless the conditions
specified in the last paragraph of this item are met;
The Debentures of the Fifth 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 equal to
, upon not
less than 30 nor more than 60 days' notice given as
provided in the Indenture. "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 the legislative body, court, governmental authority
or regulatory body, irrespective of the time or manner
in which such amendment, clarification or change is
introduced or made known, which amendment,
clarification, or change is effective, which
Administrative Action is taken or which judicial
decision is issued, in each case on or after
, 1997, 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 Company on
the Debentures is not, or will not be, fully deductible
by the Company for United States federal income tax
purposes, or (iii) the Trust is, or will be, subject to
more than a de minimis amount of other taxes, duties or
other governmental charges;
The Company may not redeem less than all the Debentures
of the Fifth 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 interest periods
terminating on or prior to the date of redemption or if
a partial redemption of Preferred Securities would
result in a delisting of such securities by any
national securities exchange on which they are then
listed;
8. So long as any Debentures of the Fifth Series are
Outstanding, the failure of the Company to pay interest
on any Debentures of the Fifth Series within 30 days
after the same becomes due and payable (whether or not
payment is prohibited by the provisions of Article
Fifteen of the Indenture) shall constitute an Event of
Default; provided, however, that a valid extension of
the interest payment period by the Company as
contemplated in Section 311 of the Indenture and
paragraph (9) of this Certificate shall not constitute
a failure to pay interest for this purpose;
9. Pursuant to Section 311 of the Indenture, the Company
shall have the right, at any time and from time to time
during the term of the Debentures of the Fifth Series,
to extend the interest payment period to a period not
exceeding (an "Extension
Period") during which period interest will be
compounded . 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 Fifth Series,
compounded , 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 Fifth Series, or make any guarantee payments
with respect to the foregoing ("Restricted Payments").
Prior to the termination of any such Extension Period,
the Company may further extend the interest payment
period, provided that such Extension Period together
with all such previous and further extensions thereof
shall not exceed at any one
time or extend beyond the maturity date of the
Debentures of the Fifth Series. Any extension period
with respect to payment of interest on the Debentures
of the Fifth Series, 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. 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 or other
Holders 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 interest
payment 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;
10. At any time, the Company will have the right to
terminate the Trust and cause the Debentures of the
Fifth Series to be distributed to the holders of the
Preferred Securities in liquidation of the Trust;
11. So long as any Securities are outstanding under the
Indenture, the Company shall not make any Restricted
Payments at any time the Company is in default under
the Guarantee with respect to the Trust or is in
default with respect to payments due on any Outstanding
Securities;
12. In the event that, at any time subsequent to the
initial authenticattion and delivery of the Debentures
of the Fifth Series, the Debentures of the Fifth 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;
13. No service charge shall be made for the registration of
transfer or exchange of the Debentures of the Fifth
Series; provided, however, that the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection
with the exchange or transfer;
14. The Debentures of the Fifth 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;
15. In the event that the Debentures of the Fifth Series
are distributed to holders of Preferred Securities as a
result of the occurrence of a Tax Event or a
liquidation upon termination of the Trust, the Company
will use its best efforts to list the Debentures of the
Fifth Series on the New York Stock Exchange;
16. The undersigned has read all of the covenants and
conditions contained in the Indenture relating to the
issuance of the Debentures of the Fifth Series and the
definitions in the Indenture relating thereto and in
respect of which this certificate is made;
17. 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;
18. In the opinion of the undersigned, he has made such
examination or investigation as is necessary to enable
the undersigned to express an informed opinion whether
or not such covenants and conditions have been complied
with; and
19. In the opinion of the undersigned, such conditions and
covenants and conditions precedent, if any (including
any covenants compliance with which constitutes a
condition precedent) to the authentication and delivery
of the Debentures of the Fifth Series requested in the
accompanying Company Order have been complied with.
20. If the Company shall make any deposit of money and/or
Government Obligations with respect to any Debentures
of the Fifth Series, or any portion of the principal
amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's
Certificate described in clause (z) in the first
paragraph of said Section 601 unless the Company shall
also deliver to the Trustee, together with such
Officer's Certificate, either:
(A) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Debentures of the Fifth
Series, shall assume the obligation (which shall be
absolute and unconditional) to irrevocably deposit with
the Trustee or Paying Agent such additional sums of
money, if any, or additional Government Obligations
(meeting the requirements of Section 601), if any, or
any combination thereof, at such time or times, as
shall be necessary, together with the money and/or
Government Obligations theretofore so deposited, to pay
when due the principal of and premium, if any, and
interest due and to become due on such Debentures of
the Fifth Series or portions thereof, all in accordance
with and subject to the provisions of said Section 701;
provided, however, that such instrument may state that
the obligation of the Company to make additional
deposits as aforesaid shall be subject to the delivery
to the Company by the Trustee of a notice asserting the
deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation
thereof; or
(B) an Opinion of Counsel to the effect that the
Holders of such Debentures of the Fifth Series, or
portions of the principal amount thereof, will not
recognize income, gain or loss for United States
federal income tax purposes as a result of the
satisfaction and discharge of the Company's
indebtedness in respect thereof and will be subject to
United States federal income tax on the same amounts,
at the same times and in the same manner as if such
satisfaction and discharge had not been effected.
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this day of January, 1997.
-----------------------------
Robert S. Shapard,
Treasurer
<PAGE>
NO._______________
CUSIP NO.__________
EXHIBIT A
[FORM OF FACE OF JUNIOR SUBORDINATED DEBENTURE]
TEXAS UTILITIES ELECTRIC COMPANY
% JUNIOR SUBORDINATED DEBENTURES, SERIES E
TEXAS UTILITIES ELECTRIC COMPANY, a corporation duly
organized and existing under the laws of the State of Texas
(herein referred to as the "Company", which term includes any
successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to
____________________________________, or registered assigns, the
principal sum of ____________________ Dollars on
interest on said principal sum, from, and including,
, 1997 or from, and excluding, the most recent Interest Payment
Date through which interest has been paid or duly provided for,
at the rate of % per annum plus Additional Interest, if any,
until the principal hereof is paid or made available for payment.
The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day
months. Interest on the Securities of this series will accrue
from, and including, , 1997 through the first Interest
Payment Date, and thereafter will accrue, from, and excluding,
the last 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 the Interest Payment Date.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which
shall be the 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.
Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of New York,
the State of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts, provided, however, that, at
the option of the Company, interest on this Security may be paid
by check mailed to the address of the person entitled thereto, as
such address shall appear on the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.
TEXAS UTILITIES 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 December 1, 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 , 1997 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
, 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 Securities of this 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
, upon not less than 30 nor more than 60
days' notice given as provided in the Indenture. "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 the legislative body, court, governmental authority or
regulatory body, irrespective of the time or manner in which such
amendment, clarification or change is introduced or made known,
which amendment, clarification, or change is effective, which
Administrative Action is taken or which judicial decision is
issued, in each case on or after , 1997, 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
Company on the Debentures is not, or will not be, fully
deductible by the Company for United States federal income tax
purposes, or (iii) the Trust is, or will be, subject to more than
a de minimis amount of other taxes, duties or other governmental
charges;
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.
So long as no Event of Default under the Indenture
shall have occurred and be continuing, 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 (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
, 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 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 or pursuant to the Indenture.
The Securities of this series are issuable only in
registered form without coupons in denominations of $ and
any integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor and of
authorized denominations, as requested by the Holder surrendering
the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
Exhibit 4(e)
GUARANTEE AGREEMENT
Between
Texas Utilities Electric Company
(as Guarantor)
and
The Bank of New York
(as Trustee)
dated as of
, 1997
<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 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
SECTION 3.03 Certain Rights of Guarantee Trustee . . . . . . 9
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . 9
SECTION 4.01 Guarantee Trustee; Eligibility . . . . . . . . . 9
SECTION 4.02 Compensation and Reimbursement . . . . . . . . . 10
SECTION 4.03 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . . . . 11
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.01 Guarantee . . . . . . . . . . . . . . . . . . . 11
SECTION 5.02 Waiver of Notice and Demand . . . . . . . . . . 12
SECTION 5.03 Obligations Not Affected . . . . . . . . . . . . 12
SECTION 5.04 Rights of Holders . . . . . . . . . . . . . . . 13
SECTION 5.05 Guarantee of Payment . . . . . . . . . . . . . . 13
SECTION 5.06 Subrogation . . . . . . . . . . . . . . . . . . 13
SECTION 5.07 Independent Obligations . . . . . . . . . . . . 13
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01 Subordination . . . . . . . . . . . . . . . . . 14
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 . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.04 Benefit . . . . . . . . . . . . . . . . . . . . 16
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
, 1997, 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 Securities (as
defined herein) of TU Electric Capital , a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of , 1997 between the Trustees of
the Issuer named therein, Texas Utilities Electric Company, as Depositor,
and the several Holders (as defined therein) the Issuer is issuing as of
the date hereof $ ,000,000 aggregate Liquidation Amount of its %
Cumulative Securities (the " Securities")
representing ownership interests in the Issuer and having the terms set
forth in the Trust Agreement;
WHEREAS, the Securities are to be issued for sale by
the Issuer and the proceeds are to be invested in $ ,000,000 principal
amount of Debentures (as defined in the Trust Agreement); and
WHEREAS, in order to enhance the value of the
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.
"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.
"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
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 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 Securities called for redemption by the Issuer
but only if and to the extent that the Property Trustee has available in
the Payment Account funds sufficient to make such payment, (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Securities as provided in the Trust
Agreement or upon a redemption of all of the Securities upon
maturity or redemption of the Debentures as provided in the Trust
Agreement), the lesser of (a) the aggregate of the Liquidation Amount of
all Securities and all accrued and unpaid Distributions on the
Securities to the date of payment but only if and to the extent
that the Property Trustee has available in the Payment Account funds
sufficient to make such payment, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each
such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Securities then outstanding;
provided, however, that in determining whether the holders of the requisite
percentage of 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 December 1, 1995,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee pursuant to which the Debentures are issued, together with any
indenture supplemental thereto.
"Majority in Liquidation Amount of the Securities"
means a vote by Holders, voting separately as a class, of more than 50% of
the aggregate Liquidation Amount of all 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;
(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.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government, or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge
of and familiarity with the particular subject.
"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 SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, not later than December 31 and June 30
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 December 31 of each year, commencing December 31, 1997, 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 as and to the extent required by Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an
officer 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 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 or waived before
the giving of such notice, provided that, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
Responsible Officers of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless a Responsible Officer 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) 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 such duties and only such duties as
are specifically set forth in this Guarantee Agreement, and no implied
covenants or obligations shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.06), and is
actually known to a Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be construed
to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the Guarantee Trustee, unless it shall be proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a
Majority in Liquidation Amount of the Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights
or powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
(d) Whether or not therein expressly provided, every provision
of this Guarantee Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of Sections 3.01(b) and 3.01(c).
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(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 reliance on such
advice or opinion; such counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its employees;
the Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing contained in this Section 3.02(a)(v) shall
be taken to relieve the Guarantee Trustee, upon the occurrence
and continuance of an Event of Default, of its obligation under
the last sentence of Section 3.01(b) to exercise the rights and
powers vested in it by this Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(vii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Guarantee Trustee
shall not be responsible for any misconduct or negligence on the
part of any 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 relying on or acting in accordance with such instructions;
(ix) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including
any financing or continuation statement or any tax or securities
form) (or any rerecording, refiling or re-registration thereof);
and
(x) the Guarantee Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which
the Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any
such right, power, duty or obligation. No permissive power or authority
available to the Guarantee Trustee shall be construed to be a duty.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken
as the statements of the Guarantor, and the Guarantee Trustee does not
assume any responsibility for their correctness. The Guarantee Trustee
makes no representation as to the validity or sufficiency of this Guarantee
Agreement.
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 Agreement (including the
reasonable compensation and expenses of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from and
against, any and all loss, damage, claim, liability or expense, including
taxes (other than taxes based upon the income of the Guarantee Trustee)
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance of the trusts created by, or the
administration of, this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the
Guarantor under this Section, the Guarantee Trustee shall have a lien prior
to the 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 or removal,
the Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
Guarantee Trustee to all Holders in the manner provided in Section 8.03
hereof. Each notice shall include the name of the successor Guarantee
Trustee and the address of its Corporate Trust Office.
(f) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by 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
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
Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the
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 Property Trustee or the Holders to enforce, assert or
exercise any right, privilege, power or remedy conferred on the
Property Trustee or the Holders pursuant to the terms of the
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
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Guarantee Trustee, the Property Trustee
or the Holders to give notice to, or obtain consent of, the Guarantor or
any other Person with respect to the happening of any of the foregoing.
SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) if an
Event of Default has occurred and is continuing, the Guarantee Trustee has
the right to enforce this Guarantee Agreement on behalf of the Holders;
(iii) the Holders of a Majority in Liquidation Amount of the
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) 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.
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 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 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 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 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 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. This Guarantee Agreement may be
amended only by an instrument in writing entered into by the Guarantor and
the Guarantee Trustee. Except with respect to any changes which do not
materially adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of not less than 66 2/3% in
aggregate Liquidation Amount of all the outstanding
Securities. The provisions of Article VI of the Trust Agreement concerning
meetings of Holders shall apply to the giving of such approval. Nothing
herein contained shall be deemed to require that the Guarantee Trustee
enter into any amendment of this Guarantee Agreement.
SECTION 8.03 NOTICES. Any notice, request or other
communication required or permitted to be given hereunder shall be in
writing, duly signed by the party giving such notice, and delivered,
telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the
Guarantee Trustee and the Holders of the 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 Trustees') address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice of to the Guarantee Trustee
and the Holders:
TU Electric Capital
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 Guarantor and the Holders of the 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 Securities.
SECTION 8.05 INTERPRETATION. In this Guarantee Agreement,
unless the context otherwise requires:
(a) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(b) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice
versa; and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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(f)
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of , 1997 between Texas
Utilities Electric Company, a Texas corporation ("TU Electric"),
and TU Electric Capital , 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 % Cumulative
Securities (the " 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 , 1997 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 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 obligations of the Trust to pay to holders of any
Securities or other similar interests in the Trust the
amounts due such holders pursuant to the terms of the
Securities or such other similar interests, as the case may be.
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
Securities or any Beneficiary must restore payment of any
sums paid under the 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 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
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
c/o , Administrative Trustee
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
Texas Utilities Electric Company
1601 Bryan Street
Dallas, Texas 75201
Facsimile No.: 214-812-2488
Attention: Treasurer
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
<PAGE>
THIS AGREEMENT is executed as of the day and year first
above
written.
TEXAS UTILITIES ELECTRIC COMPANY
By:
-----------------------------
Name:
Title:
TU ELECTRIC CAPITAL
By:
-----------------------------
not in his/her individual
capacity, but solely
as Administrative Trustee
[Clearing Agency Legend]
EXHIBIT 4(g)
Certificate Number Number of Securities
P- CUSIP NO.
Certificate Evidencing Securities
of
TU Electric Capital
% Cumulative Securities
(liquidation amount $ per Security)
TU Electric Capital , a statutory business trust
created under the laws of the State of Delaware (the "Trust"),
hereby certifies that ____________ (the "Holder") is the
registered owner of _____ (_____) securities of the
Trust representing an undivided beneficial interest in the assets
of the Trust and designated the TU Electric Capital %
Cumulative Securities (liquidation
amount $ per Security) (the "
Securities"). The 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 Securities are
set forth in, and this certificate and the
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 ,
1997, as the same may be amended from time to time (the "Trust
Agreement") including the designation of the terms of
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 , 1997 (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.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees
of the Trust has executed this certificate for and on behalf of
the Trust.
Dated:
TU ELECTRIC CAPITAL
By:
---------------------------
not in his (her)
individual capacity, but
solely as Administrative
Trustee
Countersigned and Registered:
TEXAS UTILITIES SERVICES INC.,
Transfer Agent and Registrar
By:
--------------------------
(Authorized Signature)
THE BANK OF NEW YORK, as agent
for the Transfer Agent and
Registrar
By:
--------------------------
(Authorized Signature)
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and
transfers this Security to:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(Insert assignee's social security or tax identification number)
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(Insert address and zip code of assignee)
of the Securities represented by this Certificate
and irrevocably appoints
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
attorney to transfer such Securities Certificate on
the books of the Trust. The attorney may substitute another to
act for him or her.
Date:
-----------------
Signature:
-------------------------
(Sign exactly as your name appears on the other side of this
Securities Certificate)
Signature:
------------------------
(Sign exactly as your name appears on the other side of this
Securities Certificate)
Exhibit 5(a)
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.
ATTORNEYS AND COUNSELORS AT LAW
ENERGY PLAZA
1601 BRYAN STREET, 30TH FLOOR
DALLAS, TEXAS 75201
-------------------
TELEPHONE (214) 979-3000
FAX (214) 880-0011
January 15, 1997
Texas Utilities Electric Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Reference is made to the Registration Statement
(Registration Statement) on Form S-3 to be filed by Texas
Utilities Electric Company (Company) on or about the date hereof,
with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, for the registration of (i) Securities
(Securities) of TU Electric Capital IV and TU Electric Capital V
(collectively, the Trusts) having an aggregate liquidation
preference of up to $500,000,000, such Securities to be offered
in one or more underwritten public offerings; (ii) one or more
Guarantees of the Company with respect to the Securities
(collectively, the Guarantees); and (iii) up to $500,000,000 in
aggregate principal amount of the Company s Junior Subordinated
Debentures (Debentures) to be issued pursuant to the terms of an
indenture from the Company to The Bank of New York, as trustee
(Indenture) and purchased by the relevant Trust with the proceeds
of the sale of the Securities. In connection therewith, we have
reviewed such documents and records as we have deemed necessary
to enable us to express an opinion on the matters covered hereby.
Based upon the foregoing, we are of the opinion that:
1. All requisite action necessary to make each Guarantee a
valid, legal and binding obligation of the Company will have been
taken when the Board of Directors of the Company, or an officer
duly authorized thereby, shall have taken such action as may be
necessary to fix and determine the terms of such Guarantee and
such Guarantee shall have been duly executed and delivered by the
parties thereto;
2. All requisite action necessary to make the Debentures
valid, legal and binding obligations of the Company will have
been taken when the Board of Directors of the Company, or an
officer duly authorized thereby, shall have taken such action as
may be necessary to fix and determine the terms of the
Debentures, and the Debentures shall have been issued and
delivered to the related Trust for the consideration contemplated
in the Registration Statement;
in each case, except as such may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally
and by general principles of equity.
We are members of the State Bar of Texas and do not hold
ourselves out as experts on the laws of New York. As to all
matters of New York law, we have with your consent relied upon an
opinion of even date herewith addressed to you by Reid & Priest
LLP of New York, New York.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name
as counsel in the Registration Statement and as authority for
certain of the information incorporated by reference therein.
Very truly yours,
WORSHAM, FORSYTHE
& WOOLDRIDGE, L.L.P.
By: /s/ T. A. Mack
-------------------------
A Partner
Exhibit 5(b) and 8
REID & PRIEST LLP
40 West 57th Street
New York, NY 10019
Telephone 212 603-2000
Fax 212 603-2001
January 15, 1997
Texas Utilities Electric Company
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Reference is made to the Registration Statement
(Registration Statement) on Form S-3 to be filed by Texas
Utilities Electric Company (Company) on or about the date hereof,
with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, for the registration of (i) Securities
(Securities) of TU Electric Capital IV and TU Electric Capital V
(collectively, the Trusts) having an aggregate liquidation
preference of up to $500,000,000, such Securities to be offered
in one or more underwritten public offerings; (ii) one or more
Guarantees of the Company with respect to the Securities
(collectively, the Guarantees); and (iii) up to $500,000,000 in
aggregate principal amount of the Company's Junior Subordinated
Debentures (Debentures) to be issued pursuant to the terms of an
indenture from the Company to The Bank of New York, as trustee
(Indenture) and purchased by the relevant Trust with the proceeds
of the sale of the Securities. In connection therewith, we have
reviewed such documents and records as we have deemed necessary
to enable us to express an opinion on the matters covered hereby.
Based upon the foregoing, we are of the opinion that:
1. All requisite action necessary to make each Guarantee a
valid, legal and binding obligation of the Company will have
been taken when the Board of Directors of the Company, or an
officer duly authorized thereby, shall have taken such
action as may be necessary to fix and determine the terms of
the Guarantee and such Guarantee shall have been duly
executed and delivered by the parties thereto;
2. All requisite action necessary to make the Debentures
valid, legal and binding obligations of the Company will
have been taken when the Board of Directors of the Company,
or an officer duly authorized thereby, shall have taken such
action as may be necessary to fix and determine the terms of
the Debentures, and the Debentures shall have been issued
and delivered to the related Trust for the consideration
contemplated in the Registration Statement;
in each case, except as such may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally
and by general principles of equity.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of Texas. As to all matters
of Texas law, we have with your consent relied upon an opinion of
even date herewith addressed to you by Worsham, Forsythe &
Wooldridge, L.L.P. of Dallas, Texas.
We confirm our opinion as set forth under the caption
"Certain United States Federal Income Tax Consequences" in the
prospectus supplement constituting a part of the Registration
Statement.
We hereby consent to the use of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
Exhibit 5(c)
Richards, Layton & Finger
One Rodney Square, P.O. Box 551
Wilmington, Delaware 19899
January 15, 1997
TU Electric Capital IV
TU Electric Capital V
c/o Texas Utilities Electric Company
1601 Bryan Street
Dallas, TX 75201
Re: TU Electric Capital IV and TU Electric Capital V
------------------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Texas
Utilities Electric Company, a Texas corporation ("Texas
Utilities"), and TU Electric Capital IV and TU Electric Capital
V, each a Delaware business trust (the "Trusts"), in connection
with the matters set forth herein. At your request, this opinion
is being furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(a) The Certificates of Trust of the Trusts, each
dated as of January 8, 1997 (the "Certificates"), as filed in the
office of the Secretary of State of the State of Delaware (the
"Secretary of State") on January 14, 1997;
(b) The Trust Agreement of each Trust, dated as of
January 8, 1997, among Texas Utilities and the trustees of the
Trust named therein;
(c) The Appointments of Additional Trustees of the
Trusts, each dated as of January 15, 1997;
(d) The Registration Statement (the "Registration
Statement") on Form S-3, of the Trusts relating to undivided
beneficial interests in the assets of each Trust (each, a
"Security" and collectively, the "Securities"), as proposed to be
filed by Texas Utilities and the Trusts with the Securities and
Exchange Commission on or about January 15, 1997;
(e) A form of Amended and Restated Trust Agreement of
each Trust (including Exhibits A, B and D thereto) (each, a
"Trust Agreement", and collectively, the "Trust Agreements"), to
be entered among Texas Utilities, the trustees of the Trust named
therein, and the holders, from time to time, of undivided
beneficial interests in the assets of such Trust, attached as an
exhibit to the Registration Statement; and
(f) Certificates of Good Standing for the Trusts,
dated January 15, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not
otherwise defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a)
through (f) above. In particular, we have not reviewed any
document (other than the documents listed in paragraphs (a)
through (f) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein.
We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the
statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed
to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have
assumed (i) the authenticity of all documents submitted to us as
authentic originals, (ii) the conformity with the originals of
all documents submitted to us as copies or forms, and (iii) the
genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that
each Trust Agreement constitutes the entire agreement among the
parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation and termination
of the related Trust, and that the Trust Agreements and the
Certificates are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below,
the due creation or due organization or due formation, as the
case may be, and valid existence in good standing of each party
to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are signatories
to the documents examined by us, (iv) that each of the parties to
the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under such
documents, (v) the due authorization, execution and delivery by
all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Security is to be issued by each
Trust (collectively, the "Security Holders") of a certificate in
the form attached as Exhibit D to the Trust Agreements evidencing
ownership of such Security registered in the name of such Person
and the payment for the Security acquired by it, in accordance
with a Trust Agreement and the Registration Statement, and (vii)
that the Securities are issued and sold to the Security Holders
in accordance with Trust Agreement and the Registration
Statement. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion on
the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of
such questions of law and statutes of the State of Delaware as we
have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. Each Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act.
2. The Securities will represent valid and, subject
to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of
the respective Trusts.
3. The Security Holders, as beneficial owners of a
Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State
of Delaware. We note that the Security Holders may be obligated
to make payments as set forth in the related Trust Agreement.
We consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the
Registration Statement. In giving the foregoing consent, we do
not thereby admit that we come within the category of Persons
whose consent is required under Section 7 of the Securities Act
of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated
above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for
any purpose.
Very truly yours,
/s/ Richard, Layton & Finger
BJK/SHS/dgw
EXHIBIT 12(a)
TEXAS UTILITIES ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
TME
SEPTEMBER
1996
------------
THOUSAND OF
DOLLARS,
EXCEPT RATIOS
FIXED CHARGES:
Interest on mortgage bonds $ 495,671
Interest on other long-term debt 32,627
Amortization of debt discount, (premium)
and expense 11,091
Amortization of loss on reacquired debt 21,788
Other interest charges 51,203
Rentals representative of the 20,842
interest factor ----------
$ 633,222
Total fixed charges ==========
EARNINGS:
Net income $ 895,124
Add:
Federal income taxes 262,342
Deferred federal income taxes - net 172,541
Federal investment tax credits - net (21,690)
633,222
Fixed charges ----------
$1,941,539
Total earnings ==========
RATIO OF EARNINGS TO FIXED 3.07
CHARGES . . . . . . . . . . . . . . . . . . . ====
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1995 1994 1993 1992
---- ---- ---- ----
THOUSAND OF DOLLARS, EXCEPT RATIOS
FIXED CHARGES:
Interest on mortgage
bonds $ 526,977 $ 567,363 $ 610,999 $ 598,235
Interest on other
long-term debt 44,071 32,183 45,787 54,379
Amortization of debt
discount, (premium)
and expense 9,959 8,615 6,493 4,778
Amortization of loss
on reacquired debt 19,547 17,608 12,471 9,301
Other interest
charges 28,994 36,408 10,222 22,123
Rentals
representative of
the interest 24,329 26,017 29,637 30,828
factor ---------- ---------- ---------- ----------
Total fixed $ 653,877 $ 688,194 $ 715,609 $ 719,644
charges ========== ========== ========== ==========
EARNINGS:
Net income $ 454,432 $ 658,192 $ 476,526 $ 821,123
Add:
Federal income
taxes 201,534 146,633 96,951 29,049
Deferred federal
income taxes -
net 32,620 219,752 164,487 233,125
Federal investment
tax credits -
net (21,201) (23,698) (19,698) (20,322)
653,877 688,194 715,609 719,644
Fixed charges ---------- ---------- ---------- ----------
$1,321,262 $1,689,073 $1,433,875 $1,782,619
Total earnings ========== ========== ========== ==========
RATIO OF EARNINGS TO 2.02 2.45 2.00 2.48
FIXED CHARGES ==== ==== ==== ====
EXHIBIT 12(b)
TEXAS UTILITIES ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
TME
SEPTEMBER
1996
------------
THOUSAND OF
DOLLARS,
EXCEPT RATIOS
FIXED CHARGES:
Interest on mortgage bonds $ 495,671
Interest on other long-term debt 32,627
Amortization of debt discount, (premium)
and expense 11,091
Amortization of loss on reacquired debt 21,788
Other interest charges 51,203
20,842
Rentals representative of the interest factor ----------
Total fixed charges $ 633,222
71,376
Preferred dividends* ----------
$ 704,598
Fixed charges and preferred dividends ==========
EARNINGS:
Net income $ 895,124
Add:
Federal income taxes 262,342
Deferred federal income taxes - net 172,541
Federal investment tax credits - net (21,690)
633,222
Fixed charges ----------
$1,941,539
Total earnings ==========
RATIO OF EARNINGS TO FIXED
CHARGES AND PREFERRED 2.76
DIVIDENDS ====
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1995 1994 1993 1992
---- ---- ---- ----
THOUSAND OF DOLLARS, EXCEPT RATIOS
FIXED CHARGES:
Interest on mortgage
bonds $ 526,977 $ 567,363 $ 610,999 $ 598,235
Interest on other
long-term debt 44,071 32,183 45,787 54,379
Amortization of debt
discount, (premium)
and expense 9,959 8,615 6,493 4,778
Amortization of loss
on reacquired debt 19,547 17,608 12,471 9,301
Other interest
charges 28,994 36,408 10,222 22,123
Rentals
representative of
the interest 24,329 26,017 29,637 30,828
factor ---------- ---------- ---------- ----------
Total fixed
charges $ 653,877 $ 688,194 $ 715,609 $ 719,644
93,371 143,233 168,465 138,160
Preferred dividends* ---------- ---------- ---------- ----------
Fixed charges and
preferred $ 747,248 $ 831,427 $ 884,074 $ 857,804
dividends ========== ========== ========== ==========
EARNINGS:
Net income $ 454,432 $ 658,192 $ 476,526 $ 821,123
Add:
Federal income
taxes 201,534 146,633 96,951 29,049
Deferred federal
income taxes -
net 32,620 219,752 164,487 233,125
Federal investment
tax credits -
net (21,201) (23,698) (19,698) (20,322)
653,877 688,194 715,609 719,644
Fixed charges ---------- ---------- ---------- ----------
$1,321,262 $1,689,073 $1,433,875 $1,782,619
Total earnings ========== ========== ========== ==========
RATIO OF EARNINGS TO
FIXED CHARGES AND 1.77 2.03 1.62 2.08
PREFERRED DIVIDENDS ==== ==== ==== ====
* 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 of pre-tax
income to net income.
DELOITTE &
TOUCHE LLP
------------ ----------------------------------------------------------
Suite 1600 Telephone: (214) 777-7000
Texas Commerce Tower
2200 Ross Avenue
Dallas, Texas 75201-6778
EXHIBIT 15
Texas Utilities Electric Company:
We have reviewed, in accordance with standards established by the
American Institute of Certified Public Accountants, the unaudited
condensed interim financial information of Texas Utilities Electric
Company for the periods ended March 31, 1996 and 1995, June 30, 1996
and 1995, and September 30, 1996 and 1995, as indicated in our
reports dated May 7, 1996, and August 6, 1996 and November 5, 1996,
respectively; because we did not perform an audit, we expressed
no opinion on that information.
We are aware that our reports referred to above, which were included
in the Quarterly Reports of on Form 10-Q for the quarters ended March
31, 1996 and June 30, 1996 and September 30, 1996, are being used in
this Registration Statement.
We also are aware that the aforementioned reports, pursuant to
Rule 436(c) under the Securities Act of 1933, are not
considered a part of the Registration Statement prepared or
certified by an accountant or a report prepared or certified by
an accountant within the meaning of Sections 7 and 11 of that
Act.
/s/ DELOITTE & TOUCHE LLP
January 14, 1997
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-3 of our report dated February 29, 1996 appearing in the
Company's Annual Report on Form 10-K for the year ended December
31, 1995 and to the reference to us under the heading "Experts"
in the Prospectus which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
January 14, 1997
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
TU ELECTRIC CAPITAL IV
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
_________________
TU ELECTRIC CAPITAL IV
PREFERRED SECURITIES*
(Title of the indenture securities)
----------------
*Specific title to be determined in connection with sale of TU
Electric Capital IV Preferred Securities.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks 2 Rector Street, New York,
of the State of New York N.Y. 10006 and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance 550 17th Street, N.W.,
Corporation Washington, D.C. 20429
New York Clearing House New York, N.Y.
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The
Bank of New York (formerly Irving Trust
Company) as now in effect, which contains the
authority to commence business and a grant of
powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-
6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the
Trustee. (Exhibit 4 to Form T-1 filed with
Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by
Section 321(b) of the Act. (Exhibit 6 to
Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of
the Trustee published pursuant to law or to
the requirements of its supervising or
examining authority.
----------------------------
* Pursuant to General Instruction B, the Trustee has responded
only to Items 1, 2 and 16 of this form since to the best of the
knowledge of the Trustee the obligor is not in default under
any indenture under which the Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 8th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
---------------------------
Walter N. Gitlin
Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the
Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin. . . . . . . . . . . . . . $ 4,404,522
Interest-bearing balances. . . . . . . . . . . . . 732,833
Securities:
Held-to-maturity securities. . . . . . . . . . . . 789,964
Available-for-sale securities. . . . . . . . . . . 2,005,509
Federal funds sold in domestic
offices of the bank:
Federal funds sold . . . . . . . . . . . . . . . . 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned
income. . . . . . . . . . . . . . . . 28,728,602
LESS: Allowance for loan and
lease losses. . . . . . . . . . . . . 584,525
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . . 28,143,648
Assets held in trading accounts. . . . . . . . . . . 1,004,242
Premises and fixed assets (including
capitalized leases). . . . . . . . . . . . . . . . 605,668
Other real estate owned. . . . . . . . . . . . . . . 41,238
Investments in unconsolidated subsid-
iaries and associated companies. . . . . . . . . . 205,031
Customers' liability to this bank on
acceptances outstanding. . . . . . . . . . . . . . 949,154
Intangible assets. . . . . . . . . . . . . . . . . . 490,524
Other assets . . . . . . . . . . . . . . . . . . . . 1,305,839
-----------
Total assets . . . . . . . . . . . . . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $20,441,318
Noninterest-bearing . . . . . . . . . 8,158,472
Interest-bearing. . . . . . . . . . . 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs. . . . . . . . . 11,710,903
Noninterest-bearing . . . . . . . . . 46,182
Interest-bearing. . . . . . . . . . . 11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased. . . . . . . . . . . . . . 1,565,288
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . . 293,186
Trading liabilities. . . . . . . . . . . . . . . . . 826,856
Other borrowed money:
With original maturity of one year or less . . . . 2,103,443
With original maturity of more than
one year . . . . . . . . . . . . . . . . . . . . 20,766
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . . 951,116
Subordinated notes and debentures. . . . . . . . . . 1,020,400
Other liabilities. . . . . . . . . . . . . . . . . . 1,522,884
-----------
Total liabilities. . . . . . . . . . . . . . . . . . 40,456,160
-----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . . 942,284
Surplus. . . . . . . . . . . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . . 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . . ( 2,073)
Cumulative foreign currency
translation adjustments. . . . . . . . . . . . . . ( 8,403)
-----------
Total equity capital . . . . . . . . . . . . . . . . 3,586,850
-----------
Total liabilities and equity capital . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
Exhibit 25(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
TU ELECTRIC CAPITAL V
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
_________________
TU ELECTRIC CAPITAL V
PREFERRED SECURITIES*
(Title of the indenture securities)
------------------
*Specific title to be determined in connection with sale of TU Electric
Capital V Preferred Securities.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006 and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York, N.Y.
New York 10045
Federal Deposit Insurance 550 17th Street, N.W., Washington,
Corporation D.C. 20429
New York Clearing House New York, N.Y.
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The Bank
of New York (formerly Irving Trust Company) as now
in effect, which contains the authority to
commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. - The consent of the Trustee required by Section
321(b) of the Act. (Exhibit 6 to Form T-1 filed
with Registration Statement No. 33-44051.)
7. - A copy of the latest report of condition of the
Trustee published pursuant to law or to the
requirements of its supervising or examining
authority.
-------------------------------
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 8th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
-----------------------------
Walter N. Gitlin
Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal
Reserve System, at the close of business September 30, 1996,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . $ 4,404,522
Interest-bearing balances . . . . . . . . . . . . 732,833
Securities:
Held-to-maturity securities . . . . . . . . . . . 789,964
Available-for-sale securities . . . . . . . . . . 2,005,509
Federal funds sold in domestic
offices of the bank:
Federal funds sold . . . . . . . . . . . . . . . 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . 28,728,602
LESS: Allowance for loan and
lease losses . . . . . . . . . . . 584,525
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . 28,143,648
Assets held in trading accounts . . . . . . . . . . 1,004,242
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . 605,668
Other real estate owned . . . . . . . . . . . . . . 41,238
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . 205,031
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . 949,154
Intangible assets . . . . . . . . . . . . . . . . . 490,524
Other assets . . . . . . . . . . . . . . . . . . . 1,305,839
-----------
Total assets . . . . . . . . . . . . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $20,441,318
Noninterest-bearing . . . . . . . . . 8,158,472
Interest-bearing . . . . . . . . . . 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . 11,710,903
Noninterest-bearing . . . . . . . . . 46,182
Interest-bearing . . . . . . . . . . 11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased . . . . . . . . . . . . . 1,565,288
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . 293,186
Trading liabilities . . . . . . . . . . . . . . . . 826,856
Other borrowed money:
With original maturity of one year or less . . . 2,103,443
With original maturity of more than
one year . . . . . . . . . . . . . . . . . . . 20,766
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . 951,116
Subordinated notes and debentures . . . . . . . . . 1,020,400
Other liabilities . . . . . . . . . . . . . . . . . 1,522,884
----------
Total liabilities . . . . . . . . . . . . . . . . . 40,456,160
----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . 942,284
Surplus . . . . . . . . . . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . ( 2,073)
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . ( 8,403)
-----------
Total equity capital . . . . . . . . . . . . . . . 3,586,850
-----------
Total liabilities and equity capital . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
Exhibit 25(c)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
TEXAS UTILITIES ELECTRIC COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-1837355
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
_________________
TEXAS UTILITIES ELECTRIC COMPANY
[ ]% JUNIOR SUBORDINATED DEBENTURES, SERIES ___, DUE ____*
(Title of the indenture securities)
------------------
*Specific title to be determined in connection with sale of [ ]%
Junior Subordinated Debentures, Series ___, Due ____.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of 2 Rector Street, New York, N.Y.
the State of New York 10006 and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York, N.Y.
New York 10045
Federal Deposit Insurance 550 17th Street, N.W., Washington,
Corporation D.C. 20429
New York Clearing House New York, N.Y.
Association
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit hereto,
pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act")
and Rule 24 of the Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form T-
1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
--------------
*Pursuant to General Instruction B, the Trustee has responded only to
Items 1, 2 and 16 of this form since to the best of the knowledge of the
Trustee the obligor is not in default under any indenture under which the
Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a responsive
answer to Item 2, the answer to said Item is based on incomplete
information.
Item 2 may, however, be considered as correct unless amended by
an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of the State
of New York, has duly caused this statement of eligibility to be signed on
its behalf by the undersigned, thereunto duly authorized, all in The City
of New York, and State of New York, on the 8th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
--------------------------
Walter N. Gitlin
Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business September 30, 1996, published in
accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . . . . . . . $ 4,404,522
Interest-bearing balances . . . . . . . . . . . . . . . . . . 732,833
Securities:
Held-to-maturity securities . . . . . . . . . . . . . . . . . 789,964
Available-for-sale securities . . . . . . . . . . . . . . . . 2,005,509
Federal funds sold in domestic
offices of the bank:
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income. . . . . . . . . . . . . . . . . . . . . 28,728,602
LESS: Allowance for loan and
lease losses. . . . . . . . . . . . . . . . . . 584,525
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve. . . . . . . . . . . . . . . 28,143,648
Assets held in trading accounts . . . . . . . . . . . . . . . . 1,004,242
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . . . . . . . 605,668
Other real estate owned . . . . . . . . . . . . . . . . . . . . 41,238
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . . . . . . . 205,031
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . . . . . . . 949,154
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . 490,524
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . 1,305,839
-----------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . $20,441,318
Noninterest-bearing . . . . . . . . . . . . . . 8,158,472
Interest-bearing. . . . . . . . . . . . . . . . 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs. . . . . . . . . . . . . . . 11,710,903
Noninterest-bearing . . . . . . . . . . . . . . 46,182
Interest-bearing. . . . . . . . . . . . . . . . 11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased . . . . . . . . . . . . . . . . . . . 1,565,288
Demand notes issued to the U.S.
Treasury. . . . . . . . . . . . . . . . . . . . . . . . . . . 293,186
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . 826,856
Other borrowed money:
With original maturity of one year or less. . . . . . . . . . 2,103,443
With original maturity of more than
one year. . . . . . . . . . . . . . . . . . . . . . . . . . 20,766
Bank's liability on acceptances
executed and outstanding. . . . . . . . . . . . . . . . . . . 951,116
Subordinated notes and debentures . . . . . . . . . . . . . . . 1,020,400
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . 1,522,884
----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 40,456,160
----------
EQUITY CAPITAL
--------------
Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . 942,284
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities. . . . . . . . . . . . . . . ( 2,073)
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . . . . . . . ( 8,403)
-----------
Total equity capital. . . . . . . . . . . . . . . . . . . . . . 3,586,850
-----------
Total liabilities and equity capital. . . . . . . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
Exhibit 25(d)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
TEXAS UTILITIES ELECTRIC COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-1837355
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
_________________
TEXAS UTILITIES ELECTRIC COMPANY GUARANTEE WITH RESPECT TO
TU ELECTRIC CAPITAL IV
PREFERRED SECURITIES*
(Title of the indenture securities)
--------------
*Specific title to be determined in connection with sale of TU
Electric Capital IV Preferred Securities.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks 2 Rector Street, New York,
of the State of New York N.Y. 10006 and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York
New York N.Y. 10045
Federal Deposit Insurance 550 17th Street, N.W.,
Corporation Washington, D.C. 20429
New York Clearing House New York, N.Y.
Association
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit hereto,
pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act")
and Rule 24 of the Commission's Rules of Practice.
1. - A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form T-
1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-------------------
*Pursuant to General Instruction B, the Trustee has responded only to
Items 1, 2 and 16 of this form since to the best of the knowledge of the
Trustee the obligor is not in default under any indenture under which the
Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a responsive
answer to Item 2, the answer to said Item is based on incomplete
information.
Item 2 may, however, be considered as correct unless amended by
an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of the State
of New York, has duly caused this statement of eligibility to be signed on
its behalf by the undersigned, thereunto duly authorized, all in The City
of New York, and State of New York, on the 8th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
-------------------------
Walter N. Gitlin
Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business September 30, 1996, published in
accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . . . . . . . $ 4,404,522
Interest-bearing balances . . . . . . . . . . . . . . . . . . 732,833
Securities:
Held-to-maturity securities . . . . . . . . . . . . . . . . . 789,964
Available-for-sale securities . . . . . . . . . . . . . . . . 2,005,509
Federal funds sold in domestic
offices of the bank:
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income. . . . . . . . . . . . . . . . . . . . 28,728,602
LESS: Allowance for loan and
lease losses. . . . . . . . . . . . . . . . . 584,525
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve. . . . . . . . . . . . . . . 28,143,648
Assets held in trading accounts . . . . . . . . . . . . . . . . 1,004,242
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . . . . . . . 605,668
Other real estate owned . . . . . . . . . . . . . . . . . . . . 41,238
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . . . . . . . 205,031
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . . . . . . . 949,154
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . 490,524
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . 1,305,839
-----------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . $20,441,318
Noninterest-bearing . . . . . . . . . . . . . . 8,158,472
Interest-bearing. . . . . . . . . . . . . . . . 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs. . . . . . . . . . . . . . 11,710,903
Noninterest-bearing . . . . . . . . . . . . . . 46,182
Interest-bearing. . . . . . . . . . . . . . . . 11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased . . . . . . . . . . . . . . . . . . 1,565,288
Demand notes issued to the U.S.
Treasury. . . . . . . . . . . . . . . . . . . . . . . . . . 293,186
Trading liabilities . . . . . . . . . . . . . . . . . . . . . 826,856
Other borrowed money:
With original maturity of one year or less. . . . . . . . . 2,103,443
With original maturity of more than
one year. . . . . . . . . . . . . . . . . . . . . . . . . 20,766
Bank's liability on acceptances
executed and outstanding. . . . . . . . . . . . . . . . . . 951,116
Subordinated notes and debentures . . . . . . . . . . . . . . 1,020,400
Other liabilities . . . . . . . . . . . . . . . . . . . . . . 1,522,884
----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 40,456,160
----------
EQUITY CAPITAL
--------------
Common stock. . . . . . . . . . . . . . . . . . . . . . . . . 942,284
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves. . . . . . . . . . . . . . . . . . . . . . . . . . 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities. . . . . . . . . . . . . . ( 2,073)
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . . . . . . ( 8,403)
-----------
Total equity capital. . . . . . . . . . . . . . . . . . . . . 3,586,850
-----------
Total liabilities and equity capital. . . . . . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
Exhibit 25(e)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
TEXAS UTILITIES ELECTRIC COMPANY
(Exact name of obligor as specified in its charter)
Texas 75-1837355
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
_________________
TEXAS UTILITIES ELECTRIC COMPANY GUARANTEE WITH RESPECT TO
TU ELECTRIC CAPITAL V
PREFERRED SECURITIES*
(Title of the indenture securities)
------------------
*Specific title to be determined in connection with sale of TU Electric
Capital V Preferred Securities.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006 and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York, N.Y.
New York 10045
Federal Deposit Insurance 550 17th Street, N.W.,
Corporation Washington, D.C. 20429
New York Clearing House New York, N.Y.
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The Bank
of New York (formerly Irving Trust Company) as now
in effect, which contains the authority to
commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. - The consent of the Trustee required by Section
321(b) of the Act. (Exhibit 6 to Form T-1 filed
with Registration Statement No. 33-44051.)
7. - A copy of the latest report of condition of the
Trustee published pursuant to law or to the
requirements of its supervising or examining
authority.
--------------------------
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 8th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
-----------------------------
Walter N. Gitlin
Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal
Reserve System, at the close of business September 30, 1996,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
ASSETS in Thousands
------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . $ 4,404,522
Interest-bearing balances . . . . . . . . . . . . 732,833
Securities:
Held-to-maturity securities . . . . . . . . . . . 789,964
Available-for-sale securities . . . . . . . . . . 2,005,509
Federal funds sold in domestic
offices of the bank:
Federal funds sold . . . . . . . . . . . . . . . 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income . . . . . . . . . . . . . . 28,728,602
LESS: Allowance for loan and
lease losses . . . . . . . . . . . 584,525
LESS: Allocated transfer risk
reserve . . . . . . . . . . . . . . 429
Loans and leases, net of unearned
income, allowance, and reserve . . . . . . . . 28,143,648
Assets held in trading accounts . . . . . . . . . . 1,004,242
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . 605,668
Other real estate owned . . . . . . . . . . . . . . 41,238
Investments in unconsolidated subsid-
iaries and associated companies . . . . . . . . . 205,031
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . 949,154
Intangible assets . . . . . . . . . . . . . . . . . 490,524
Other assets . . . . . . . . . . . . . . . . . . . 1,305,839
-----------
Total assets . . . . . . . . . . . . . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . . . . . . . . . . $20,441,318
Noninterest-bearing . . . . . . . . . 8,158,472
Interest-bearing . . . . . . . . . . 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . 11,710,903
Noninterest-bearing . . . . . . . . . 46,182
Interest-bearing . . . . . . . . . . 11,664,721
Federal funds purchased in domestic
offices of the bank:
Federal funds purchased . . . . . . . . . . . . . 1,565,288
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . . . . . . . . 293,186
Trading liabilities . . . . . . . . . . . . . . . . 826,856
Other borrowed money:
With original maturity of one year or less . . . 2,103,443
With original maturity of more than
one year . . . . . . . . . . . . . . . . . . . 20,766
Bank's liability on acceptances
executed and outstanding . . . . . . . . . . . . 951,116
Subordinated notes and debentures . . . . . . . . . 1,020,400
Other liabilities . . . . . . . . . . . . . . . . . 1,522,884
----------
Total liabilities . . . . . . . . . . . . . . . . . 40,456,160
----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . . . . . . . . . . 942,284
Surplus . . . . . . . . . . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . 2,129,376
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . ( 2,073)
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . ( 8,403)
-----------
Total equity capital . . . . . . . . . . . . . . . 3,586,850
-----------
Total liabilities and equity capital . . . . . . . $44,043,010
===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
