EXHIBIT 1(a)
TXU ELECTRIC COMPANY
[Name of Security]
UNDERWRITING AGREEMENT
[Date]
as Representatives of the Underwriters
named in Schedule II hereto (the "Representatives")
c/o
Ladies and Gentlemen:
1. Introduction. TXU Electric Company, a Texas corporation (the
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"Company"), proposes to issue and sell severally to the underwriters named in
Schedule II hereto (the "Underwriters") [1 of shares of the Company's
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cumulative preferred stock, without par value, of the series ("Preferred
----
Stock"),] [2an aggregate of , of depositary shares, series
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("Depositary Shares"), each representing of a share of Preferred Stock,]
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[3$ aggregate principal amount of the Company's first mortgage bonds ("First
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Mortgage Bonds")] [4$ aggregate principal amount of the Company's debt
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securities ("Debt Securities")] having the designation and with the terms
specified in Schedule I hereto (the "Securities").
[2 The Preferred Stock underlying the Depositary Shares sold to
the Underwriters is to be deposited pursuant to a deposit agreement (the
"Deposit Agreement'), among the Company, [NAME OF BANK] as depositary (with its
successors, the "Depositary") and the holders of depositary receipts
("Depositary Receipts") evidencing the Depositary Shares. The Depositary Shares
are to be issued pursuant to the Deposit Agreement with respect to the Preferred
Stock so deposited.]
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1 For use in connection with Preferred Stock.
2 For use in connection with Depositary Shares.
3 For use in connection with First Mortgage Bonds.
4 For use in connection with Debt Securities.
2. Description of Securities.
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[1 The Securities shall have the preferences, designations, rights,
privileges, powers, restrictions, limitations and qualifications set forth
in the Company's Restated Articles of Incorporation, as amended, with
respect to Preferred Stock and the resolution of the Company's Board of
Directors establishing and setting forth the terms of the Securities,
copies of which have been furnished to Pillsbury Winthrop LLP ("Counsel for
the Underwriters").]
[2 Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled to, in proportion to the applicable
fraction of a share of Preferred Stock represented by such Depositary
Share, all of the preferences, designations, rights, privileges, powers,
restrictions, limitations and qualifications of the Preferred Stock
represented thereby set forth in the Company's Restated Articles of
Incorporation, as amended, and the resolutions of the Company's Board of
Directors establishing and setting forth the terms of the Preferred Stock
and Depositary Shares, copies of which have been furnished to Pillsbury
Winthrop LLP ("Counsel for the Underwriters").]
[3 The Company proposes to issue the First Mortgage Bonds under its
Mortgage and Deed of Trust, dated as of December 1, 1983, to Irving Trust
Company (now The Bank of New York), Trustee, as heretofore supplemented and
as it is to be further supplemented by a Supplemental Indenture
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(the "Supplemental Indenture") to be dated as of , in
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substantially the form heretofore delivered to you, said Mortgage and Deed
of Trust, as heretofore supplemented and as it is to be so further
supplemented, being hereinafter referred to as the "Mortgage".]
[4 The Debt Securities are to be issued pursuant to the provisions of an
Indenture (For Unsecured Debt Securities), dated as of , between the
Company and The Bank of New York, as trustee (the "Indenture Trustee"),
said Indenture, together with any amendments or supplements thereto, being
hereinafter referred to as the "Indenture". The Debt Securities shall have
the rights, privileges, powers, restrictions, limitations and
qualifications set forth in the Company officer's certificate to the
Indenture Trustee dated , 2000 and in the form of the
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Securities annexed thereto, copies of which have been furnished to
Pillsbury Winthrop LLP ("Counsel for the Underwriters").]
3. Representations and Warranties of the Company. The Company
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represents and warrants to the several Underwriters that:
(a) The Company, TXU Electric Capital VI, TXU Electric Capital VII and
TXU Electric Capital VIII have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 on , 2000
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1 For use in connection with Preferred Stock.
2 For use in connection with Depositary Shares.
3 For use in connection with First Mortgage Bonds.
4 For use in connection with Debt Securities.
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(Registration Nos. 333- , 333- -01, 333- -02 and 333- -03) for the
registration under the Securities Act of 1933, as amended (the "Securities Act")
of $923,850,000 aggregate amount of (i) the Company's cumulative preferred
stock, without par value (ii) depositary shares representing fractional shares
in preferred stock, evidenced by depositary receipts, (iii) one or more series
of the Company's first mortgage bonds, (iv) the Company's unsecured debt
securities and (v) the preferred trust securities (the "Trust Securities") of
TXU Electric Capital VI, TXU Electric Capital VII and TXU Electric Capital VIII
and (vi) an equal principal amount of the Company's junior subordinated
debentures and guarantees and other obligations of the Company in respect of
such Trust Securities. Such registration Statement ("Registration Statement No.
333- ") was declared effective by the Commission on , 2000. In
addition, the Company has filed with the Commission a registration statement on
Form S-3 on September 18, 1993 (Registration No. 33-69554), for the registration
of (i) 750,000 shares of the Company's preferred stock, without par value and
(ii) an indeterminate number of depositary shares, of which all but 250,000
shares of preferred stock have been previously issued. Such registration
statement ("Registration Statement No. 33-69554") was declared effective by the
Commission on October 5, 1993. References herein to the term "Registration
Statement" as of any date shall be deemed to refer to each of Registration
Statement No. 33-69554 and Registration Statement No. 333- , each as amended
and 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"); provided that if the Companies file a registration statement with
respect to securities registered under Registration Statement No. 33-69554 and
Registration Statement No. 333- with the Commission pursuant to Rule 462(b) of
the Securities Act (the "Rule 462(b) Registration Statement"), then after such
filing, all references to "Registration Statement" shall be deemed to include
the Rule 462(b) Registration Statement. References herein to the term
"Prospectus" as of any given date shall be deemed to refer to the combined
prospectus, including any preliminary prospectus, relating to the securities
registered under Registration Statement No. 333- and the securities
registered and remaining unissued under Registration Statement No. 333-69554
that forms a part of Registration Statement No. 333- , as amended or
supplemented as of such date (other than by amendments or supplements relating
to securities other than the Securities), including all Incorporated Documents
as of such date and including any prospectus supplement relating to the
Securities. References herein to the term "Effective Date" shall be deemed to
refer to the later of the time and date Registration Statement No. 333- , any
post-effective amendment to Registration Statement No. 333- or any Rule
462(b) Registration Statement was declared effective or the time and date of the
filing thereafter of the Company's most recent Annual Report on Form 10-K if
such filing is made prior to the Closing Date, as hereinafter defined. The
Company will not file any amendment to the Registration Statement or supplement
to the Prospectus on or after the date of this Agreement and prior to the
Closing Date, as hereinafter defined, without prior notice to the Underwriters,
or to which Counsel for the Underwriters shall reasonably object in writing. For
the purposes of this Agreement, any Incorporated Document filed with the
Commission on or after the date of this Agreement and prior to the Closing Date,
as hereinafter defined, shall be deemed an amendment or supplement to the
Registration Statement and the Prospectus.
(b) On the Effective Date, the Registration Statement and the
Prospectus fully complied and at the Closing Date, as hereinafter defined, the
Registration Statement, the Prospectus, the Mortgage and the Indenture will
fully comply in all material respects with the applicable provisions of the
Securities Act, the Trust Indenture Act of 1939, as amended (the "Trust
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Indenture Act"), and the applicable rules and regulations of the Commission
thereunder; on the Effective Date, the Registration Statement did not, and at
the Closing Date, as hereinafter defined, the Registration Statement will not,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; on the Effective Date, the Prospectus did not, and at the Closing
Date, as hereinafter defined, and on the date it is filed with the Commission
pursuant to Rule 424 of the General Rules and Regulations of the Securities Act
("Rule 424"), the Prospectus will not, contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and on said dates the Incorporated Documents, taken together as a
whole, fully complied or will fully comply in all material respects with the
applicable provisions of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the applicable rules and regulations of the Commission
thereunder, and, when read together with the Prospectus on said dates did not
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the foregoing representations and warranties in this
paragraph (b) shall not apply to statements or omissions made in reliance upon
information furnished in writing to the Company by, or on behalf of, any
Underwriter, through the Representatives, for use in connection with the
preparation of the Registration Statement or the Prospectus or to any statements
in or omissions from the Statements of Eligibility under the Trust Indenture
Act, or amendments thereto, filed as exhibits to the Registration Statement.
(c) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, charter, by-laws or other agreement or instrument to which the Company
is now a party.
4. Purchase and Sale. On the basis of the representations and
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warranties herein contained, and subject to the terms and conditions herein set
forth, the Company shall sell to each of the Underwriters, and each Underwriter
shall purchase from the Company, at the time and place herein specified,
severally and not jointly, the respective number or aggregate amount of the
Securities set forth opposite the name of such Underwriter in Schedule II
attached hereto, at the purchase price or prices set forth in Schedule I hereto.
5. Time and Place of Closing. Delivery of the Securities against
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payment of the aggregate purchase price, plus accumulated dividends or accrued
interest, as the case may be, thereon, if any, from the [date of original
issuance] to the date of payment for and delivery of the Securities, therefor by
wire transfer in federal funds by the Underwriters or on their behalf shall be
made at the offices of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, at 10:00 A.M., New York time, on , or at such other place, time
and date as shall be agreed upon in writing by the Company and the Underwriters
or established in accordance with the following paragraph. The hour and date of
such delivery and payment are herein called the "Closing Date". The Securities
shall be delivered to The Depository Trust Company or to The Bank of New York,
as custodian for The Depository Trust Company, in fully registered global form
registered in the name of Cede & Co., for the respective accounts specified by
the Underwriters not later than the close of business on the business day
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preceding the Closing Date or such other time as may be agreed upon by the
Underwriters. The Company agrees to make the Securities available to the
Underwriters for checking purposes not later than 2:00 P.M., New York time, on
the last business day preceding the Closing Date at the offices of ▇▇▇▇▇▇ ▇▇▇▇ &
Priest LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, or at such other
place as the Company may specify.
If any Underwriter shall fail or refuse (otherwise than for some
reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the [9number] [10principal amount] of the Securities that such Underwriter
has agreed to purchase and pay for hereunder, the Company shall immediately give
notice to the other Underwriters of the default of such Underwriter, and the
other Underwriters shall have the right within 24 hours after the receipt of
such notice to determine to purchase, or to procure one or more other
underwriters, who are members of the National Association of Securities Dealers,
Inc. ("NASD") (or, if not members of the NASD, who are not eligible for
membership in the NASD and who agree (i) to make no sales within the United
States, its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply with the NASD's
Conduct Rules) and are satisfactory to the Company, to purchase, upon the terms
herein set forth, [1 number] [2 principal amount] of the Securities that the
defaulting Underwriter had agreed but failed or refused to purchase. If any
non-defaulting 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, the Closing Date shall be postponed for such period,
not exceeding three business days, as the Company shall determine. If no
non-defaulting Underwriter shall give such notice, then this Agreement may be
terminated by the Company, upon like notice given to the non-defaulting
Underwriters, within a further period of 24 hours. If in such case the Company
shall not elect to terminate this Agreement, it shall have the right,
irrespective of such default:
(a) to require each non-defaulting Underwriter to purchase and pay for
the respective number or amount of the Securities that it had agreed to purchase
hereunder as hereinabove provided and, in addition, the [1 number] [2 principal
amount] of the Securities that the defaulting Underwriter shall have so failed
to purchase up to a number or amount thereof equal to one-ninth (1/9) of the
number or amount of Securities that such non-defaulting Underwriter has
otherwise agreed to purchase hereunder, and/or
(b) to procure one or more persons, reasonably acceptable to the
Representatives, who are members of the NASD (or, if not members of the NASD,
who are not eligible for membership in the NASD and who agree (i) to make no
sales within the United States, its territories or its possessions or to persons
who are citizens thereof or residents therein and (ii) in making sales to comply
with the NASD's Conduct Rules), to purchase, upon the terms herein set forth,
either all or a part of the [3 number] [4 amount] of the Securities that such
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1 For use in connection with Preferred Stock and Depositary Shares.
2 For use in connection with Unsecured Debt Securities and First Mortgage
Bonds.
3 For use in connection with Preferred Stock and Depositary Shares.
4 For use in connection with Unsecured Debt Securities and First Mortgage
Bonds.
5
defaulting Underwriter had agreed but failed or refused to purchase or that
portion thereof, if any, that the remaining Underwriters shall not be obligated
to purchase pursuant to the foregoing clause (a).
In the event the Company shall exercise its rights under (a) and/or
(b) above, the Company shall give written notice thereof to the non-defaulting
Underwriters within such further period of 24 hours, and thereupon the Closing
Date shall be postponed for such period, not exceeding three business days, as
the Company shall determine.
In the computation of any period of 24 hours referred to in this
Section 5, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday that would otherwise be included in such
period of time.
Any action taken by the Company under this Section 5 shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement. Termination by the Company under this Section
5 shall be without any liability on the part of the Company or any
non-defaulting Underwriter, except as otherwise provided in Sections 6(g) and 9
hereof.
6. Covenants of the Company. The Company agrees that:
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(a) It will promptly deliver to the Underwriters 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 the Underwriters, as soon as practicable after
the date hereof, as many copies of the Prospectus as of such date as the
Underwriters may reasonably request.
(c) It will cause the Prospectus to be filed with the Commission
pursuant to Rule 424 as soon as practicable and advise the Underwriters of the
issuance of any stop order under the Securities Act with respect to the
Registration Statement or the institution of any proceedings therefor of which
the Company shall have received notice. The Company will use its best efforts to
prevent the issuance of any such stop order and to secure the prompt removal
thereof if issued.
(d) If, during such period of time (not exceeding nine months) after
the Prospectus has been filed with the Commission pursuant to Rule 424 as in the
opinion of Counsel for the Underwriters a prospectus covering the Securities is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, any event relating to or affecting the Company or of which the Company
shall be advised in writing by the Underwriters shall occur that in the
Company's reasonable opinion after consultation with Counsel for the
Underwriters should be set forth in a supplement to, or an amendment of, the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances when it is delivered to a purchaser, the Company will, at its
expense, amend or supplement the Prospectus by either (i) preparing and
furnishing to the Underwriters 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
6
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading; provided that should such event relate
solely to the activities of any of the Underwriters, then the Underwriters shall
assume the expense of preparing and furnishing any such amendment or supplement.
In case any Underwriter is required to deliver a prospectus after the expiration
of nine months from the date the Prospectus is filed with the Commission
pursuant to Rule 424, the Company, upon the Underwriter's request, will furnish
to the Underwriter, at the expense of the Underwriters, a reasonable quantity of
a supplemental prospectus or supplements to the Prospectus complying with
Section 10(a) of the Securities Act.
(e) It will make generally available to its security holders, as soon
as practicable, an earnings statement (which need not be audited) covering a
period of at least twelve months beginning not earlier than the first day of the
month next succeeding the month in which occurred the effective date of the
Registration Statement as defined in Rule 158 under the Securities Act.
(f) It will furnish such proper information as may be lawfully
required and otherwise cooperate in qualifying the Securities for offer and sale
under the blue-sky laws of such jurisdictions as the Underwriters may designate,
provided that the Company shall not be required to qualify as a foreign
corporation or dealer in securities, to file any consents to service of process
under the laws of any jurisdiction, or to meet any other requirements deemed by
the Company to be unduly burdensome.
(g) It will, except as herein provided, pay all expenses and taxes
(except transfer taxes) in connection with (i) the preparation and filing by it
of the Registration Statement, (ii) the issuance and delivery of the Securities
as provided in Section 5 hereof (including, without limitation, all trustee and
rating agency fees), (iii) the qualification of the Securities under blue-sky
laws (including counsel fees not to exceed $7,500 and reasonable disbursements
of counsel), and (iv) the printing and delivery to the Underwriters of
reasonable quantities of the Registration Statement and, except as provided in
Section 6(d) hereof, of the Prospectus. The Company shall not, however, be
required to pay any amount for any expenses of 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 the Underwriters for the fees and
disbursements of Counsel for the Underwriters, whose fees and disbursements the
Underwriters agree to pay in any other event, and will reimburse the
Underwriters for their reasonable out-of-pocket expenses, in an aggregate amount
not exceeding $5,000, incurred in contemplation of the performance of this
Agreement. The Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits.
(h) During the period from the date of this Agreement to the Closing
Date, the Company will not, without the prior written consent of the
Representatives, directly or indirectly, publicly issue, sell, offer or contract
to sell, in the market in which the Securities are being offered and sold, any
securities of the Company or any of its subsidiaries which are of the same class
as the Securities.
7. Conditions of Underwriters' Obligations. The obligations of the
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Underwriters to purchase and pay for the Securities shall be subject to the
accuracy of the representations and warranties made herein on the part of the
7
Company, to the performance by the Company of its obligations to be performed
hereunder prior to the Closing Date, and to the following conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424 prior to 5:30 P.M., New York time, on the second business day after
the date of this Agreement, or such other time and date as may be approved by
the Underwriters.
(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 the
Underwriters 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, the Underwriters shall have received from
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, General Counsel for the Company, ▇▇▇▇▇▇ ▇▇▇▇ &
Priest LLP, of counsel for the Company, and Pillsbury Winthrop LLP, Counsel for
the Underwriters, opinions in substantially the form and substance prescribed in
Schedules III, IV and V hereto (i) with such changes therein as may be agreed
upon by the Company and the Underwriters, with the approval of Counsel for the
Underwriters, and (ii) if the Prospectus relating to the Securities shall be
supplemented or amended after the Prospectus shall have been filed with the
Commission pursuant to Rule 424, with any changes therein necessary to reflect
such supplementation or amendment.
(d) On and as of the Closing Date, the Underwriters 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 consolidated financial statements audited
by them and included or incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting requirements of the
Exchange Act and the related rules and regulations by the Commission thereunder,
(iii) on the basis of a reading of the unaudited amounts of operating revenues
and net income included or incorporated by reference in the Prospectus and the
related consolidated financial statements from which these amounts were derived,
the latest available unaudited consolidated 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) any material
modifications should be made to the unaudited condensed consolidated financial
statements of the Company included in the quarterly reports, incorporated by
reference in the Prospectus, for them to be in conformity with generally
accepted accounting principles, (B) the unaudited condensed consolidated
financial statements included in the quarterly reports do not conform in all
material respects with the applicable accounting requirements of the Exchange
8
Act and the related rules and regulations adopted by the Commission, (C) for the
months ended , 2000, if available, there were any decreases in
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operating revenues or net income as compared with the comparable period of the
preceding year, and (D) at a specified date not more than five 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, long term debt or long-term debt due
currently of the Company or decrease in its net assets, in each case as compared
with amounts shown in the most recent consolidated balance sheets of the Company
incorporated by reference in the Prospectus, except in all instances for changes
or decreases that the Prospectus discloses have occurred or may occur or which
are occasioned by the declaration of a regular quarterly dividend or the
acquisition of long-term debt for sinking fund purposes, or which are described
in such letter, and (iv) they have compared the dollar amounts (or percentages
or ratios derived from such dollar amounts) and other financial information
included or incorporated by reference in the Registration Statement and the
Prospectus as reasonably requested by the Underwriters (in each case to the
extent that such dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its consolidated
subsidiaries subject to the internal controls of the accounting system of such
companies or are derived indirectly from such records by analysis or
computation) with the results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such letter, and have found
such dollar amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such letter.
(e) Since the most recent dates as of which information is given in
the Registration Statement or the Prospectus, there shall not have been any
material adverse change in the business, property or financial condition of the
Company and its subsidiaries, considered as a whole, whether or not in the
ordinary course of business, and, since such dates, there shall not have been
any material transaction entered into by any of the Company and its material
subsidiaries, in each case other than transactions in the ordinary course of
business and transactions contemplated by the Registration Statement or
Prospectus, and at the Closing Date the Underwriters shall have received a
certificate to such effect dated the Closing Date and signed by an officer of
the Company.
(f) All legal proceedings to be taken in connection with the issuance
and sale of the Securities as described in the Prospectus shall have been
satisfactory in form and substance to Counsel for the Underwriters.
(g) [4 At the Closing Date, (i) the Securities shall be rated at least
and by ▇▇▇▇▇'▇ Investor Service, Inc. ("Moody's"), and
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Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
("S&P"), respectively, and the Company shall have delivered to the Underwriters
a letter from each such rating agency, or other evidence satisfactory to the
Underwriters, confirming that the respective Securities have such ratings, and
(ii) neither Moody's nor S&P shall have, since the date of this Agreement,
downgraded or publicly announced that it has under surveillance or review, with
possible negative implications, its ratings of the Securities or any securities
of the Company which are of the same class as the Securities, or of the
financial condition of the Company.]
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4 For use in connection with Unsecured Debt Securities.
9
In case any of the conditions specified above in this Section 7 shall
not have been fulfilled, this Agreement may be terminated by the Representatives
upon notice thereof to the Company. Any such termination shall be without
liability of any party to any other party except as otherwise provided in
Sections 6(g) and 9 hereof.
8. Conditions of Company's Obligations. The obligation of the
-----------------------------------
Company to deliver the Securities shall be subject to the conditions that the
Prospectus shall have been filed with the Commission pursuant to Rule 424 prior
to 5:30 P.M., New York time, on the second business day after the date of this
Agreement or such other time and date as may be approved by the Company, and no
stop order suspending the effectiveness of the Registration Statement shall be
in effect at the Closing Date and no proceedings for that purpose shall be
pending before, or threatened by, the Commission at the Closing Date. In case
these conditions shall not have been fulfilled, this Agreement may be terminated
by the Company upon notice thereof to the Underwriters. Any such termination
shall be without liability of any party to any other party except as otherwise
provided in Sections 6(g) and 9 hereof.
9. Indemnification.
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(a) The Company shall indemnify, defend and hold harmless each
Underwriter, its officers and directors 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) as and when incurred by them in
connection with investigating any such losses, claims, damages or liabilities or
in connection with defending any actions, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the indemnity agreement contained in this Section 9
shall not apply to any such losses, claims, damages, liabilities, expenses or
actions arising out of, or based upon, any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by any Underwriter, through the Representatives,
expressly for use in connection with the preparation of the Registration
Statement or the Prospectus or any amendment or supplement to either thereof, or
arising out of, or based upon, statements in or omissions from that part of the
Registration Statement that shall constitute the Statements of Eligibility on
Form T-1 under the Trust Indenture Act of any trustee with respect to any
indenture qualified pursuant to the Registration Statement; and provided
further, that the indemnity agreement contained in this Section 9 shall not
inure to the benefit of any Underwriter (or of any officer or director of such
Underwriter or of any person controlling such Underwriter) on account of any
such losses, claims, damages, liabilities, expenses or actions arising from the
sale of the Securities to any person if a copy of the Prospectus (including any
amendment or supplement thereto if any amendments or supplements thereto shall
have been furnished to the Underwriters at or prior to the time of written
confirmation of the sale involved) (exclusive of the Incorporated Documents)
10
shall not have been given or sent to such person by or on behalf of any
Underwriter with or prior to the written confirmation of the sale involved
unless the alleged omission or alleged untrue statement was not corrected in the
Prospectus at the time of such written confirmation. The indemnity agreement of
the Company contained in this Section 9 and the representations and warranties
of the Company contained in Section 3 hereof shall remain operative and in full
force and effect regardless of any termination of this Agreement or of any
investigation made by or on behalf of any Underwriter, its officers or its
directors or any such controlling person, and shall survive the delivery of the
Securities.
(b) Each Underwriter shall indemnify, defend and hold harmless the
Company, its officers and directors, and each person who controls the Company
within the meaning of Section 15 of the Securities Act, from and against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act or any other statute or
common law and shall reimburse each of them for any legal or other expenses
(including, to the extent hereinafter provided, reasonable counsel fees) as and
when incurred by them in connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any actions, insofar as
such losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such Underwriter, through the Representatives, for
use in connection with the preparation of the Registration Statement or the
Prospectus or any amendment or supplement to either thereof. Each Underwriter
hereby furnishes to the Company in writing expressly for use in the Prospectus
[indicate topics addressed and location in the Prospectus]. The Company
acknowledges that the statements set forth in the preceding sentence constitute
the only information furnished in writing by or on behalf of the several
Underwriters expressly for use in the Prospectus. The indemnity agreement of the
respective Underwriters contained in this Section 9 shall remain operative and
in full force and effect regardless of any termination of this Agreement or of
any investigation made by or on behalf of the Company, its directors or its
officers, any such Underwriter, or any such controlling person, and shall
survive the delivery of the Securities.
(c) The Company and the several Underwriters each shall, upon the
receipt of notice of the commencement of any action against it or any person
controlling it as aforesaid, in respect of which indemnity may be sought on
account of any indemnity agreement contained herein, promptly give written
notice of the commencement thereof to the party or parties against whom
indemnity shall be sought hereunder, but the failure to notify such indemnifying
party or parties of any such action shall not relieve such indemnifying party or
parties from any liability hereunder to the extent it is not materially
prejudiced as a result of such failure to notify and in any event shall not
relieve it from any liability 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
11
parties who shall be defendant or defendants in such action, and such defendant
or defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume the
defense of such action, such indemnifying party will reimburse such indemnified
party or parties for the reasonable fees and expenses of any counsel retained by
them; provided, however, if the defendants in any such action (including
impleaded parties) include both the indemnified party and the indemnifying party
and counsel for the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the representation by a single
counsel of both the indemnifying party and the indemnified party, the
indemnified party or parties shall have the right to select separate counsel,
satisfactory to the indemnifying party, whose reasonable fees and expenses shall
be paid by such 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 fees and expenses of
more than one separate counsel (in addition to local counsel) representing the
indemnified parties who are parties to such action). Each of the Company and the
several Underwriters agrees that without the other party's prior written
consent, which consent shall not be unreasonably withheld, it will not settle,
compromise or consent to the entry of any judgment in any claim in respect of
which indemnification may be sought under the indemnification provisions of this
Agreement, unless such settlement, compromise or consent (i) includes an
unconditional release of such other party from all liability arising out of such
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of such other party.
(d) If the indemnification provided for in subparagraph (a) or (b)
above shall be unenforceable under applicable law by an indemnified party, each
indemnifying party agrees to contribute to such indemnified party with respect
to any and all losses, claims, damages, liabilities and expenses for which each
such indemnification provided for in subparagraph (a) or (b) above shall be
unenforceable, in such proportion as shall be appropriate to reflect (i) the
relative fault of each indemnifying party on the one hand and the indemnified
party on the other in connection with the statements or omissions which have
resulted in such losses, claims, damages, liabilities and expenses, (ii) the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Securities pursuant to this
Agreement, and (iii) any other relevant equitable considerations; provided,
however, that no indemnified party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party not guilty of such fraudulent
misrepresentation. Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified party and
each such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and each of the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subparagraph (d) were to be determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute in
excess of the amount equal to the excess of (i) the total price at which the
Securities underwritten by it were offered to the public, over (ii) the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission. The obligations of each Underwriter to contribute pursuant to this
12
Section 9 are several and not joint and shall be in the same proportion as such
Underwriter's obligation to underwrite Securities is to the total amount of
Securities set forth in Schedule II hereto.
10. Termination. This Agreement may be terminated, at any time prior
-----------
to the Closing Date, by the Representatives by written notice to the Company if
after the date hereof and at or prior to the Closing Date, (a) there shall have
occurred any suspension or material limitation of trading of any of the
Company's securities on the New York Stock Exchange, Inc. ("NYSE") or any
general suspension of trading in securities on the NYSE, the American Stock
Exchange, Inc. ("AMEX") or the NASDAQ Stock Market, Inc. ("NASDAQ") or there
shall have been established by the NYSE, AMEX or NASDAQ or by the Commission or
by any federal or state agency or by the decision of any court, any general
limitation on prices for such trading or any general restrictions on the
distribution of securities, or a general banking moratorium declared by New York
or federal authorities, or (b) there shall have occurred any (i) new material
outbreak of hostilities or (ii) new material other national or international
calamity or crisis, including, but not limited to, an escalation of hostilities
that existed prior to the date of this Agreement or (iii) material adverse
change in the financial markets in the United States, and the effect of any such
event specified in clause (a) or (b) above on the financial markets of the
United States shall be such as to make it impracticable, in the reasonable
judgment of the Representatives, for the Underwriters to enforce contracts for
the sale of the Securities. This Agreement may also be terminated with respect
to the Securities at any time prior to the Closing Date by the Representatives
if, in their reasonable judgment, the subject matter of any amendment or
supplement to the Registration Statement or the Prospectus (other than an
amendment or supplement relating solely to the activity of any Underwriter or
Underwriters) prepared and issued by the Company after the effectiveness of this
Agreement shall have disclosed a material adverse change in the business,
property or financial condition of the Company and its subsidiaries, considered
as a whole, whether or not in the ordinary course of business, that has
materially impaired the marketability of the 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 the Representatives at
the addresses set forth above, or, if to the Company, shall be mailed or
delivered to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer.
13
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter and your acceptance shall constitute a
binding agreement between the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
TXU ELECTRIC COMPANY
By
------------------------------
Accepted and delivered as of
the date first above written
[Representatives of Underwriters]
By:
By:
----------------------------------
14
SCHEDULE I
----------
Underwriting Agreement dated:
Representatives:
Designation:
[1 Number of shares]
[1 Liquidation Preference Amount per share:]
[2 Principal Amount:]
[2 Date of Maturity:]
[3 Supplemental Indenture, if any, dated as of:]
[1 Dividend Rate:]
[2 Interest Rate:]
Purchase Price:
Underwriting Commissions (payable by the Company):
Public Offering Price:
------------------------
1 For use in connection with Preferred Stock and Depositary Shares.
2 For use in connection with Unsecured Debt Securities and First Mortgage
Bonds.
3 For use in connection with First Mortgage Bonds.
I-1
SCHEDULE II
-----------
TXU ELECTRIC COMPANY
[name of Security]
[Number] [Principal Amount] of
Name Securities
---- ----------
[names of Underwriters]
Total
----- ==============================
II-1
SCHEDULE III
------------
[LETTERHEAD OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP]
[Date]
as Representatives of the Underwriters named in Schedule II to the Underwriting
Agreement, as herein defined
c/o
Ladies and Gentlemen:
We have acted as General Counsel to TXU Electric Company (the
"Company") in connection with the issuance and sale by the Company of of
----
its ("Securities") pursuant to the Underwriting Agreement dated
-------------
among the Company and the Representatives of the several
--------------
Underwriters named therein (the "Underwriting Agreement").
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, [1 the Indenture][2 the Mortgage][3 the Depository
Agreement], and the Securities. We have also examined such other documents and
satisfied ourselves as to such other matters as we have deemed necessary as a
basis for the conclusions of law contained in the opinions expressed below. We
have relied as to various questions of fact upon the representations and
warranties of the Company contained in the Underwriting Agreement and, where we
deemed appropriate, on certificates of public officials.
------------------------
1 For use in connection with Debt Securities.
2 For use in connection with First Mortgage Bonds.
3 For use in connection with Depositary Shares.
III-1
[1 We have relied upon a certificate of the trustee under the
Indenture as to the due authentication of the Securities.][2 We have relied upon
a certificate of the trustee under the Mortgage as to the due authentication of
the Securities.] In our examination we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents submitted to us as
photostatic or certified copies.
Upon the basis of our familiarity with these transactions and with the
affairs and properties of the Company generally, we are of the opinion that:
o The Company is a corporation duly authorized, validly existing
and in good standing under the laws of the State of Texas, and has the corporate
power and authority: (a) to execute, deliver and perform its obligations under
the Underwriting Agreement [1 and the Indenture] [2 and the Mortgage] and [3 the
Deposit Agreement], (b) to issue the Securities [1,2 and to incur the
indebtedness to be evidenced thereby] and (c) to own its property and assets and
to conduct the business which it is now conducting.
o [2 The Company has good and sufficient title to all the
properties presently owned by the Company which are described in the Mortgage as
owned by it and as subject to the lien thereof, subject only to excepted
encumbrances as defined in the Mortgage, and to minor defects and encumbrances
customarily found in properties of like size and character, which do not
materially impair the use of such properties by the Company; the descriptions in
the Mortgage of such properties are adequate to constitute the Mortgage and a
lien on the properties so described; the Mortgage constitutes a valid direct
mortgage lien, subject only to the exceptions enumerated above, on such
properties, which include substantially all the permanent physical properties
and franchises of the Company (other than those expressly excepted); all
permanent physical properties and franchises acquired by the Company after the
date of the Supplemental Indenture (other than those expressly excepted) will,
upon such acquisition, become subject to the lien of the Mortgage, subject,
however, to liens if any, existing or placed thereon at the time of the
acquisition thereof by the Company, and subject to the exceptions enumerated
above.]
o The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
o [4 The Securities conform as to legal matters with the statements
concerning them in the Prospectus, have been duly and validly authorized and
issued, are fully paid and non-assessable, and are entitled to the rights,
privileges and preferences set forth in the Restated Articles of Incorporation,
as amended, of the Company.]
------------------------
1 For use in connection with Debt Securities.
2 For use in connection with First Mortgage Bonds.
3 For use in connection with Depositary Shares.
4 For use in connection with Preferred Stock and Depositary Shares.
III-2
o [1 The Indenture has been duly qualified under the Trust
Indenture Act.]
o [1 The Securities and the Indenture have been duly authorized,
executed and delivered by the Company; the Securities, when issued against
payment therefor as contemplated by the Underwriting Agreement, will be entitled
to the benefits of the Indenture; and the Securities (when so issued) and the
Indenture are legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally, general
principles of equity and an implied covenant of good faith, fair dealing and
reasonableness.]
o [2 The Mortgage has been duly and validly authorized by all
necessary corporate action, has been duly and validly executed and delivered,
and is a valid and binding instrument, enforceable 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 and
mortgagees' generally, general principles of equity and an implied covenant of
good faith, fair dealing and reasonableness.]
o [2 The First Mortgage Bonds will, when issued and paid for as
contemplated in the Agreement and duly authenticated by the Trustee under the
Mortgage, be legal, valid and binding obligations of the Company enforceable 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 and mortgagees' generally, general principles of equity
and an implied covenant of good faith, fair dealing and reasonableness, and will
be entitled to the security afforded by the Mortgage.]
o [2 The Mortgage is duly qualified under the Trust Indenture Act.]
o [3 The Depository Shares have been duly and validly authorized
and delivered, and each Depositary Share is entitled, subject to the terms of
the Deposit Agreement pursuant to which the Preferred Stock underlying the
Depository Shares has been deposited, in proportion to the applicable fraction
of a share of Preferred Stock represented by such Depositary Share, to the
rights and preferences of the Preferred Stock set forth in the Restated Articles
of Incorporation, as amended, of the Company.]
o [3 The Deposit Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company
enforceable in accordance with the terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors and mortgagees' generally, general
principles of equity and an implied covenant of good faith, fair dealing and
reasonableness.]
------------------------
1 For use in connection with Debt Securities.
2 For use in connection with First Mortgage Bonds.
3 For use in connection with Depositary Shares.
III-3
o The statements made in the Prospectus under the captions [Insert
titles of sections describing the Securities in the Prospectus and Prospectus
Supplement], insofar as they purport to constitute summaries of the terms of the
documents referred to therein, constitute accurate summaries of the terms of
such documents in all material respects.
o Other than as stated in the Registration Statement and the
Prospectus (or described in the Incorporated Documents), there are no material
pending legal proceedings to which the Company or any of its subsidiaries is a
party or of which property of the Company or any of its subsidiaries is the
subject which if determined adversely would have a material effect on the
Company and its subsidiaries taken as a whole, and, to our knowledge, no such
proceedings are contemplated;
o The Registration Statement, as of the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
(except for the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein and except for
that part of the Registration Statement that constitutes the Statements of
Eligibility on Form T-1, as to which we do not express any opinion) complied as
to form in all material respects with the Securities Act and the applicable
instructions, rules and regulations of the Commission thereunder; the
Incorporated Documents (except as to the financial statements and schedules and
other financial and statistical data contained therein, as to which we do not
express any opinion), at the time they were filed with the Commission, complied
as to form in all material respects with the requirements of the Exchange Act
and the applicable instructions, rules and regulations of the Commission
thereunder; and the Registration Statement has become and is effective under the
Securities Act and, to our knowledge, no proceedings for a stop order with
respect thereto are pending or threatened under Section 8 of the Securities Act.
o 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, as to which we do not express any
opinion) is legally required for the authorization of the issue and sale by the
Company of the Securities.
In the course of the preparation of the information relating to the
Company contained in the Prospectus (including the Incorporated Documents), we
had discussions with certain of its officers and representatives, with other
counsel for the Company, with Deloitte & Touche LLP, the Company's independent
certified public accountants who audited certain of the financial statements
contained in the Incorporated Documents, and with certain of your officers and
employees and your counsel, but we made no independent verification of the
accuracy or completeness of the representations and statements made to us by the
Company or the information included by the Company in the Prospectus (including
the Incorporated Documents) and take no responsibility therefor except as set
forth in paragraph [Insert number of paragraph referring to Sections of the
Prospectus] above. However, our examination of the information relating to the
Company contained in the Registration Statement and the Prospectus and our
discussions did not disclose to us anything which gives us reason to believe
that (except as to financial statements and schedules and other financial and
statistical data and except as to that part of the Registration Statement that
constitutes the Statements of Eligibility on Form T-1, as to which we do not
express any belief) (i) the Registration Statement, as of the Effective Date,
III-4
included an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the Prospectus at the time it was filed with the
Commission pursuant to Rule 424, included, or on the date hereof includes an
untrue statement of a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
We are members of the State Bar of Texas and do not hold ourselves out
as experts in the laws of the State of New York. As to all matters of New York
law, we have, with your consent, relied upon the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest
LLP, New York, New York, of Counsel to the Company.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP
By:
-----------------------------
A Partner
III-5
SCHEDULE IV
-----------
[LETTERHEAD OF ▇▇▇▇▇▇ ▇▇▇▇ & PRIEST LLP]
New York, New York
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement, as herein defined
Ladies and Gentlemen:
We have acted as counsel to TXU Electric Company (the "Company") in
connection with the issuance and sale by the Company of of its
----
("Securities") pursuant to the Underwriting Agreement dated
-------------
among the Company and the Representatives of the several
--------------
Underwriters named therein (the "Underwriting Agreement").
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, [1 the Indenture] [2 the Mortgage] [3 the Depositary
Agreement], and the Securities. We have also examined such other documents and
satisfied ourselves as to such other matters as we have deemed necessary as a
basis for the conclusions of law contained in the opinions expressed below. We
have relied as to various questions of fact upon the representations and
warranties of the Company contained in the Underwriting Agreement and, where we
deemed appropriate, on certificates of public officials. [1 We have relied upon
a certificate of the trustee under the Indenture as to the due authentication of
the Securities.][2 We have relied upon a certificate of the trustee under the
Mortgage as to the due authentication of the Securities.] In our examination we
have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity to original documents
of all documents submitted to us as photostatic or certified copies.
------------------------
1 For use in connection with Debt Securities.
2 For use in connection with First Mortgage Bonds.
3 For use in connection with Depositary Shares.
IV-1
Based on the foregoing, and subject to the qualifications and
limitations set forth herein, we are of the opinion that:
o The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
o [1 The Securities conform as to legal matters with the statements
concerning them in the Prospectus, have been duly and validly authorized and
issued, are fully paid and nonassessable, and are entitled to the rights,
privileges and preferences set forth in the Restated Articles of Incorporation,
as amended, of the Company.]
o [2 The Indenture has been duly qualified under the Trust
Indenture Act.]
o [2 The Securities and the Indenture have been duly authorized,
executed and delivered by the Company; the Securities, when issued against
payment therefor as contemplated by the Underwriting Agreement, will be entitled
to the benefits of the Indenture; and the Securities (when so issued) and the
Indenture are legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally, general
principles of equity and an implied covenant of good faith, fair dealing and
reasonableness.]
o [3 The Mortgage has been duly and validly authorized by all
necessary corporate action, has been duly and validly executed and delivered,
and is a valid and binding instrument, enforceable 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 and
mortgagees' generally, general principles of equity and an implied covenant of
good faith, fair dealing and reasonableness.]
o [3 The First Mortgage Bonds will, when issued and paid for as
contemplated in the Agreement and duly authenticated by the Trustee under the
Mortgage, be legal, valid and binding obligations of the Company enforceable 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 and mortgagees' generally, general principles of equity
and an implied covenant of good faith, fair dealing and reasonableness, and will
be entitled to the security afforded by the Mortgage.]
o [3 The Mortgage is duly qualified under the Trust Indenture Act.]
o [4 The Depositary Shares have been duly and validly authorized
and delivered, and each Depositary Share is entitled, subject to the terms of
the Deposit Agreement pursuant to which the Preferred Stock underlying the
------------------------
1 For use in connection with Preferred Stock and Depositary Shares.
2 For use in connection with Debt Securities.
3 For use in connection with First Mortgage Bonds.
4 For use in connection with Depositary Shares.
IV-2
Depository Shares has been deposited, in proportion to the applicable fraction
of a share of Preferred Stock represented by such Depositary Share, to the
rights and preferences of the Preferred Stock set forth in the Restated Articles
of Incorporation, as amended, of the Company.]
o [1 The Deposit Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company
enforceable in accordance with the terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally, general principles of equity and
an implied covenant of good faith, fair dealing and reasonableness.]
o The statements made in the Prospectus under the captions [Insert
titles of sections describing the Securities in the Prospectus and Prospectus
Supplement], insofar as they purport to constitute summaries of the terms of the
documents referred to therein, constitute accurate summaries of the terms of
such documents in all material respects.
o The Registration Statement, as of the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
(except for the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein and except for
that part of the Registration Statement that constitutes the Statements of
Eligibility on Form T-1, as to which we do not express any opinion) complied as
to form in all material respects with the Securities Act and the applicable
instructions, rules and regulations of the Commission thereunder; the
Incorporated Documents (except as to the financial statements and schedules and
other financial and statistical data contained therein, as to which we do not
express any opinion), at the time they were filed with the Commission, complied
as to form in all material respects with the requirements of the Exchange Act
and the applicable instructions, rules and regulations of the Commission
thereunder; and the Registration Statement has become and is effective under the
Securities Act and, to our knowledge, no proceedings for a stop order with
respect thereto are pending or threatened under Section 8 of the Securities Act.
o 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, as to which we do not express any
opinion) is legally required for the authorization of the issue and sale by the
Company of the Securities.
We herewith confirm as our opinion the statements under the caption
["Certain United States Federal Income Tax Considerations"] in the Prospectus.
In the course of the preparation of the information relating to the
Company contained in the Prospectus (including the Incorporated Documents), we
had discussions with certain of its officers and representatives, with other
counsel for the Company, with Deloitte & Touche LLP, the Company's independent
certified public accountants who audited certain of the financial statements
contained in the Incorporated Documents, and with certain of your officers and
------------------------
1 For use in connection with Depositary Shares.
IV-3
employees and your counsel, but we made no independent verification of the
accuracy or completeness of the representations and statements made to us by the
Company or the information included by the Company in the Prospectus (including
the Incorporated Documents) and take no responsibility therefor except as set
forth in paragraph [Insert number of paragraph referring to Sections of the
Prospectus] above. However, our examination of the information relating to the
Company contained in the Registration Statement and the Prospectus and our
discussions did not disclose to us anything which gives us reason to believe
that (except as to financial statements and schedules and other financial and
statistical data and except as to that part of the Registration Statement that
constitutes the Statements of Eligibility on Form T-1, as to which we do not
express any belief) (i) the Registration Statement, as of the Effective Date,
included an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the Prospectus at the time it was filed with the
Commission pursuant to Rule 424, included, or on the date hereof includes an
untrue statement of a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
We are members of the New York Bar and do not hold ourselves out as
experts in the laws of the State of Texas. As to all matters of Texas law, we
have, with your consent, relied upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP, Dallas, Texas, General Counsel for the Company. We believe that you and we
are justified in relying on such opinion.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇ & PRIEST LLP
IV-4
SCHEDULE V
[Letterhead of Pillsbury Winthrop LLP]
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement as defined herein
c/o
Ladies and Gentlemen:
We have acted as counsel to you and the several Underwriters in
connection with the issuance and sale by TXU Electric Company (the "Company") of
of its ("Securities") pursuant to the Underwriting Agreement
---- -------------
dated among the Company and you (the "Underwriting Agreement").
--------------
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
We are members of the New York Bar and do not hold ourselves out as
experts on the laws of the State of Texas. We have, with your consent, relied
upon an opinion of even date herewith addressed to you by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, Dallas, Texas, General Counsel for the Company, as to the
matters covered in such opinion relating to Texas law.
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. [We have not examined
the Securities, except specimens thereof, and have relied upon a certificate of
the trustee under the Indenture as to the due authentication of the Securities.]
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:
V-1
o The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
o [1 The Securities conform as to legal matters with the statements
concerning them in the Prospectus, have been duly and validly authorized and
issued, are fully paid and non-assessable, and are entitled to the rights,
privileges and preferences set forth in the Restated Articles of Incorporation,
as amended, of the Company.]
o [2 The Indenture has been duly qualified under the Trust
Indenture Act.]
o [2 The Securities and the Indenture have been duly authorized,
executed and delivered by the Company; the Securities, when issued against
payment therefor as contemplated by the Underwriting Agreement, will be entitled
to the benefits of the Indenture; and the Securities (when so issued) and the
Indenture are legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally, general
principles of equity and an implied covenant of good faith, fair dealing and
reasonableness.]
o [3 The Mortgage has been duly and validly authorized by all
necessary corporate action, has been duly and validly executed and delivered,
and is a valid and binding instrument, enforceable 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 and
mortgagees' generally, general principles of equity and an implied covenant of
good faith, fair dealing and reasonableness.]
o [3 The First Mortgage Bonds will, when issued and paid for as
contemplated in the Agreement and duly authenticated by the Trustee under the
Mortgage, be legal, valid and binding obligations of the Company enforceable 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 and mortgagees' generally, general principles of equity
and an implied covenant of good faith, fair dealing and reasonableness, and will
be entitled to the security afforded by the Mortgage.]
o [3 The Mortgage is duly qualified under the Trust Indenture Act.]
o [4 The Depository Shares have been duly and validly authorized
and delivered, and each Depositary Share is entitled, subject to the terms of
the Deposit Agreement pursuant to which the Preferred Stock underlying the
Depository Shares has been deposited, in proportion to the applicable fraction
of a share of Preferred Stock represented by such Depositary Share, to the
------------------------
1 For use in connection with Preferred Stock and Depositary Shares.
2 For use in connection with Debt Securities.
3 For use in connection with First Mortgage Bonds.
4 For use in connection with Depositary Shares.
V-2
rights and preferences of the Preferred Stock set forth in the Restated Articles
of Incorporation, as amended, of the Company.]
o [1 The Deposit Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company
enforceable in accordance with the terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally, general principles of equity and
an implied covenant of good faith, fair dealing and reasonableness.]
o The statements made in the Prospectus under the captions [Insert
titles of sections describing the Securities in the Prospectus and Prospectus
Supplement], insofar as they purport to constitute summaries of the terms of the
documents referred to therein, constitute accurate summaries of the terms of
such documents in all material respects.
o The Registration Statement, at the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
(except in each case as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference therein
and except for that part of the Registration Statement that constitutes the
Statements of Eligibility on Form T-1, as to which we do not express any
opinion) complied as to form in all material respects with the Securities Act
and the applicable instructions, rules and regulations of the Commission
thereunder.
In passing upon the form of the Registration Statement and the form of
the Prospectus, we necessarily assume the correctness and completeness of the
statements made by the Company and the information included in the Registration
Statement and the Prospectus and take no responsibility therefor, except insofar
as such statements relate to us and as set forth in paragraph 5 above. In the
course of the preparation by the Company of the Registration Statement and the
Prospectus, we have had discussions with certain of the Company's officers and
representatives, with counsel for the Company, with Deloitte & Touche LLP, the
Company's independent public accountants who audited certain of the financial
statements contained in the Incorporated Documents, and with certain of your
representatives. Our examination of the Registration Statement and the
Prospectus and our discussions did not disclose to us any information which
gives us reason to believe that at the Effective Date the Registration Statement
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, at the time it was filed with the
Commission pursuant to Rule 424, or at the date hereof, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. We do not express any
opinion or belief as to the financial statements and schedules or other
financial or statistical data contained or incorporated by reference in the
Registration Statement or Prospectus or as to that part of the Registration
Statement that constitutes the Statements of Eligibility on Form T-1.
------------------------
1 For use in connection with Depositary Shares.
V-3
This opinion is given to you solely for your use 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. This opinion is
expressed as of the date hereof, and we do not assume any obligation to update
or supplement it to reflect any fact or circumstance that hereafter comes to our
attention, or any change in law that hereafter occurs.
Very truly yours,
V-4