EXHIBIT 1(b)
[Name of Trust]
Preferred Trust Securities
UNDERWRITING AGREEMENT
[Date]
as Representatives of the Underwriters
named in Schedule II hereto (the "Representatives")
c/o
Ladies and Gentlemen:
1. Introduction. TXU Electric Company, a Texas corporation (the
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"Company"), and its financing subsidiary, [Name of Trust], a Delaware business
trust (the "Trust," and hereinafter, together with the Company, the "Offerors"),
propose for the Trust to issue and sell severally to the underwriters named in
Schedule II hereto (the "Underwriters") the Trust's Preferred Trust Securities
of the series designation, with the terms and in the liquidation preference
amount specified in Schedule I hereto (the "Preferred Trust Securities").
2. Description of Preferred Trust Securities. The Offerors propose
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for the Trust to issue the Preferred Trust Securities pursuant to an Amended and
Restated Trust Agreement, to be dated as of , among The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee,
certain employees of the Company [or its affiliate of the Company], as
Administrative Trustees, and the several Holders as defined therein in
substantially the form heretofore delivered to you as the Representatives, said
Agreement being hereinafter referred to as the "Trust Agreement". In connection
with the issuance of the Preferred Trust Securities, the Company proposes (i) to
issue its Junior Subordinated Debentures, Series (the
"Debentures") pursuant to an Indenture, dated as of [December 1, 1995] [ ,
2001] between the Company and The Bank of New York, as trustee (the "Indenture")
and (ii) to issue a guarantee of the Preferred Trust Securities to the extent
described in the Prospectus (as defined below) (the "Guarantee").
3. Representations and Warranties of the Offerors. The Offerors
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represent and warrant 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 ,
2001 (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, (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 , 2001. 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. 333- and
Registration Statement No. 333-69554, each as amended or supplemented to
such date, including all documents incorporated by reference therein as of
such date pursuant to Item 12 of Form S-3 ("Incorporated Documents");
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provided that if the Company files a registration statement with the
Commission pursuant to Section 462(b) of the Securities Act Regulations
(the "Rule 462(b) Registration Statement"), then after such filing, all
references to "Registration Statement" shall be deemed to include the Rule
462(b) Registration Statement. References herein to the term "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. 33-69554 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 Preferred Trust Securities), including all
Incorporated Documents as of such date and including any prospectus
supplement relating to the Preferred Trust 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 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 (the "Trust Indenture Act"), and the applicable rules and
regulations of the Commission thereunder; on the Effective Date, the
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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 or the Trust is now a party.
4. Purchase and Sale.
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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,
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at the time and place herein specified, severally and not jointly, the
respective number of the Preferred Trust Securities set forth opposite the name
of such Underwriter in Schedule II attached hereto, at the purchase price or
prices set forth in Schedule I hereto.
5. Time and Place of Closing. Delivery of the Preferred Trust
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Securities against payment of the aggregate purchase price therefor by wire
transfer in federal funds 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
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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 Preferred Trust Securities shall be
delivered to The Depository Trust Company or to The Bank of New York, as
custodian for The Depository Trust Company, in fully registered global form
registered in the name of Cede & Co., for the respective accounts specified by
the Underwriters not later than the close of business on the business day
preceding the Closing Date or such other time as may be agreed upon by the
Underwriters. The Trust agrees to make the Preferred Trust 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 Trust may specify.
If any Underwriter shall fail or refuse (otherwise than for some
reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the liquidation preference amount of the Preferred Trust Securities that
such Underwriter has agreed to purchase and pay for hereunder, the Company shall
immediately give notice to the other Underwriters of the default of such
Underwriter, and the other Underwriters shall have the right within 24 hours
after the receipt of such notice to determine to purchase, or to procure one or
more 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 satisfactory to the Company, to purchase, upon the
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terms herein set forth, the liquidation preference amount of the Preferred Trust
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 liquidation preference amount of the Preferred Trust
Securities that it has agreed to purchase hereunder as hereinabove provided
and, in addition, the liquidation preference amount of the Preferred Trust
Securities that the defaulting Underwriter shall have so failed to purchase
up to a liquidation preference amount thereof equal to one-ninth (1/9) of
the liquidation preference amount of Preferred Trust Securities that such
non-defaulting Underwriter has otherwise agreed to purchase hereunder,
and/or
(b) to procure one or more persons, reasonably acceptable to the
Representatives, who are members of the NASD (or, if not members of the
NASD, who are not eligible for membership in the NASD and who agree (i) to
make no sales within the United States, its territories or its possessions
or to persons who are citizens thereof or residents therein and (ii) in
making sales to comply with the NASD's Conduct Rules), to purchase, upon
the terms herein set forth, either all or a part of the liquidation
preference amount of the Preferred Trust Securities that such defaulting
Underwriter had agreed 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.
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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 Offerors shall have received notice. The Company will use its
best efforts to prevent the issuance of any such stop order and to secure
the prompt removal thereof if issued.
(d) If, during such period of time (not exceeding nine months) after
the Prospectus has been filed with the Commission pursuant to Rule 424 as
in the opinion of Counsel for the Underwriters a prospectus covering the
Preferred Trust Securities is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event relating to or affecting
the Company or the Trust or of which the Company shall be advised in
writing by the Underwriters shall occur that in the Company's reasonable
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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 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 and the
security holders of the Trust, as soon as practicable, an earnings
statement (which need not be audited) covering a period of at least twelve
months beginning not earlier than the first day of the month next
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 Preferred Trust
Securities for offer and sale under the blue-sky laws of such jurisdictions
as the Underwriters may designate, provided that neither of the Offerors
shall be required to qualify as a foreign corporation or dealer in
securities, to file any consents to service of process under the laws of
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any jurisdiction, or to meet any other requirements deemed by the Offerors
to be unduly burdensome.
(g) It will, except as herein provided, pay all expenses and taxes
(except transfer taxes) in connection with (i) the preparation and filing
by it of the Registration Statement, (ii) the issuance and delivery of the
Preferred Trust Securities as provided in Section 5 hereof (including,
without limitation, all trustee and rating agency fees), (iii) the
qualification of the Preferred Trust 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, neither the Company nor the Trust will, without the prior written
consent of the Representatives, directly or indirectly, publicly issue,
sell, offer or contract to sell, in the market in which the Preferred Trust
Securities are being offered and sold, any securities of the Company or any
of its subsidiaries or of the Trust which are of the same class as the
Preferred Trust Securities.
7. Conditions of Underwriters' Obligations. The obligations of the
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Underwriters to purchase and pay for the Preferred Trust Securities shall be
subject to the accuracy of the representations and warranties made herein on the
part of each of the Offerors, to the performance by each of the Offerors of its
obligations to be performed hereunder prior to the Closing Date, and to the
following conditions:
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(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
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., Delaware counsel for the Company and the
Trust, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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, V and VI 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 Preferred Trust Securities shall be
supplemented or amended after the Prospectus shall have been filed with the
Commission pursuant to Rule 424, with any changes therein necessary to
reflect such supplementation or amendment.
(d) On and as of the Closing Date, 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
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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 Act and the
related rules and regulations adopted by the Commission, (C) for the
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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
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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 Preferred Trust Securities, the Debentures, the Guarantee,
and the common trust securities to be issued by the Trust as described in
the Prospectus shall have been satisfactory in form and substance to
Counsel for the Underwriters.
(g) At the Closing Date, (i) the Preferred Trust Securities shall be
rated at least by ▇▇▇▇▇'▇ Investor Service, Inc. ("Moody's"), and
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 Preferred Trust
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 Preferred Trust Securities or any other securities of the
Company or a special purpose subsidiary of the Company which are of the
same class as the Preferred Trust Securities or the financial condition of
the Company.
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In case any of the conditions specified above in this Section 7 shall
not have been fulfilled, this Agreement may be terminated by the Representatives
upon notice thereof to the Company. Any such termination shall be without
liability of any party to any other party except as otherwise provided in
Sections 6(g) and 9 hereof.
8. Conditions of Offerors' Obligations. The obligation of the
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Offerors to deliver the Preferred Trust Securities shall be subject to the
conditions that the Prospectus shall have been filed with the Commission
pursuant to Rule 424 prior to 5:30 P.M., New York time, on the second business
day after the date of this Agreement or such other time and date as may be
approved by the Company, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect at the Closing Date and no proceedings
for that purpose shall be pending before, or threatened by, the Commission at
the Closing Date. In case these conditions shall not have been fulfilled, this
Agreement may be terminated by the Company upon notice thereof to 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 Offerors shall jointly and severally 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
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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
Offerors 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 Preferred Trust Securities to any
person if a copy of the Prospectus (including any amendment or supplement
thereto if any amendments or supplements thereto shall have been furnished
to the Underwriters at or prior to the time of written confirmation of the
sale involved) (exclusive of the Incorporated Documents) 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 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, its officers or its directors or any such
controlling person, and shall survive the delivery of the Preferred Trust
Securities.
(b) Each Underwriter shall indemnify, defend and hold harmless the
Offerors, their officers and directors, and each person who controls either
of the Offerors within the meaning of Section 15 of the Securities Act,
from and against any and all losses, claims, damages or liabilities, joint
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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 Offerors 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 Offerors 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 either Offeror, its directors or its
officers, any such Underwriter, or any such controlling person, and shall
survive the delivery of the Preferred Trust Securities.
(c) The Company, the Trust and the several Underwriters each shall,
upon the receipt of notice of the commencement of any action against it or
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
-15-
extent it is not or they are not materially prejudiced as a result of such
failure to notify and in any event shall not relieve it or them 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 (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, the Trust 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.
-16-
(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 Offerors on the
one hand and the Underwriters on the other hand from the offering of the
Preferred Trust Securities pursuant to this Agreement, and (iii) any other
relevant equitable considerations; provided, however, that no indemnified
party guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified party
and each such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Offerors and each of the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subparagraph (d) were to be
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute in excess of the amount equal to the excess
of (i) the total price at which the Preferred Trust Securities underwritten
by it were offered to the public, over (ii) the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission. The
obligations of each Underwriter to contribute pursuant to this Section 9
are several and not joint and shall be in the same proportion as such
Underwriter's obligation to underwrite Preferred Trust Securities is to the
total amount of Preferred Trust Securities set forth in Schedule II hereto.
-17-
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 Preferred Trust Securities. This Agreement may also be
terminated with respect to the Preferred Trust 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
Preferred Trust Securities. Any termination hereof pursuant to this Section 10
shall be without liability of any party to any other party except as otherwise
provided in Sections 6(g) and 9 hereof.
11. Miscellaneous. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT
-------------
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. This Agreement shall
inure to the benefit of the Company, the several Underwriters and, with respect
to the provisions of Section 9 hereof, each director, officer and controlling
person referred to in said Section 9, and their respective successors. Nothing
-18-
herein is intended or shall be construed to give to any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
any provision in this Agreement. The term "successor" as used herein shall not
include any purchaser, as such purchaser, of any of the Preferred Trust
Securities from any of the several Underwriters.
12. Notices. All communications hereunder shall be in writing, and,
-------
if to the Underwriters, shall be mailed or delivered to the Representatives at
the addresses set forth above, or, if to the Offerors, shall be mailed or
delivered to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
-19-
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 Offerors and the several Underwriters in
accordance with its terms.
Very truly yours,
TXU ELECTRIC COMPANY
By
--------------------------------
[NAME OF TRUST]
By
--------------------------------
(Authorized Representative)
Accepted and delivered as of
the date first above written
[REPRESENTATIVES OF UNDERWRITERS]
By:
By:
------------------------------------
-20-
SCHEDULE I
----------
Underwriting Agreement dated:
Representatives:
Designation:
Liquidation Preference Amount:
Date of Maturity:
Distribution Rate:
Purchase Price:
Underwriting Commissions (payable by the Company):
Public Offering Price:
I-1
SCHEDULE II
-----------
[Name of Trust]
Preferred Trust Securities
Number of
Preferred Trust
Name Securities
---- ----------
Total ==========
$
II-1
SCHEDULE III
------------
[LETTERHEAD OF ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & FINGER, P.A.]
[Date]
as Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement, as herein defined
c/o
Re: [Name of Trust]
---------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for TXU Electric Company, a
Texas corporation (the "Company"), and [Name of Trust], a Delaware business
trust (the "Trust"), in connection with the matters set forth herein. At your
request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of ,
2001 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on , 2001;
(b) The Trust Agreement of the Trust, dated as of , 2001,
by and among the Company and the trustees of the Trust named therein;
(c) The Prospectus, dated , 2001, and the Prospectus
Supplement, dated , (jointly, the "Prospectus"), relating to the
III-1
Preferred Trust Securities of the Trust representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Preferred Trust
Security" and collectively, the "Preferred Trust Securities");
(d) The Amended and Restated Trust Agreement of the Trust, dated as of
, (including Exhibits A, B and D thereto) (the "Trust
Agreement"), among the Company, the trustees of the Trust named therein (the
"Trustees") and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust;
(e) The Underwriting Agreement, dated , (the "Underwriting
Agreement"), among the Company, the Trust and the Underwriters named in Schedule
II thereto; and
(f) A Certificate of Good Standing for the Trust, dated , ,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (f) above, which we believe
are all the documents necessary or appropriate for us to have considered for the
purposes of rendering the opinions stated herein. In particular, we have not
reviewed any document (other than the documents listed in paragraphs (a) through
(f) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
III-2
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation, due formation or
due organization, as the case may be, and the valid existence in good standing
of each party to the documents examined by us under the laws of the jurisdiction
governing its creation, formation or organization, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) except to
the extent set forth in paragraph 2 below, that each of the parties to the
documents examined by us has the power and authority to execute and deliver, and
to perform its obligations under, such documents, (v) except to the extent
provided in paragraph 4 below, that each of the parties to the documents
examined by us has duly authorized, executed and delivered such documents, (vi)
the receipt by each Person to whom a Preferred Trust Security is to be issued by
the Trust (the "Preferred Trust Security Holders") of a Preferred Trust
Securities Certificate for the Preferred Trust Security and the payment for the
Preferred Trust Security acquired by it, in accordance with the Trust Agreement,
and as described in the Prospectus, (vii) that the Preferred Trust Securities
are issued and sold to the Preferred Trust Security Holders in accordance with
the Trust Agreement, and as described in the Prospectus, (viii) the receipt by
the Person (the "Common Trust Security Holder") to whom a Common Trust Security
of the Trust representing common undivided beneficial interests in the assets of
the Trust (each, a "Common Trust Security" and collectively, the "Common Trust
Securities") (the Preferred Trust Securities and the Common Trust Securities
being hereinafter collectively referred to as "Trust Securities") is to be
issued by the Trust of a Common Trust Securities Certificate for the Common
Trust Security and the payment for the Common Trust Security acquired by it, in
accordance with the Trust Agreement, and as described in the Prospectus, (ix)
that the Common Trust Securities are issued and sold to the Common Trust
Security Holder in accordance with the Trust Agreement, and as described in the
Prospectus, (x) that the Trust derives no income from or connected with sources
within the State of Delaware and has no assets, activities (other than having a
Delaware trustee as required by the Delaware Business Trust Act and filing
documents with the Secretary of State) or employees in the State of Delaware,
and (xi) that the Trust is treated as a grantor trust for federal income tax
purposes. We have not participated in the preparation of the Prospectus and
assume no responsibility for its contents.
III-3
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
2. Under the Delaware Business Trust Act and the Trust Agreement, the
Trust has the trust power and authority to (i) own property and conduct its
business, all as described in the Prospectus, (ii) execute and deliver, and
perform its obligations under, the Underwriting Agreement, and (iii) issue, and
perform its obligations under, the Trust Securities.
3. The Trust Agreement is a legal, valid and binding agreement of the
Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms.
4. Under the Delaware Business Trust Act and the Trust Agreement, the
execution and delivery of the Underwriting Agreement by the Trust, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all requisite trust action on the part of the Trust.
5. No authorization, approval, consent or order of any Delaware court
or Delaware governmental authority or Delaware agency is required to be obtained
by the Trust solely in connection with the issuance and sale of the Preferred
Trust Securities.
6. The Preferred Trust Securities have been duly authorized by the
Trust Agreement and, when issued and sold in accordance with the Trust
Agreement, the Preferred Trust Securities will be, subject to the qualifications
III-4
set forth in paragraph 7 below, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust.
7. The Preferred Trust Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Trust
Security Holders may be obligated, pursuant to the Trust Agreement, to (i)
provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of Preferred Trust
Securities Certificates and the issuance of replacement Preferred Trust
Securities Certificates, and (ii) provide security or indemnity in connection
with requests of or directions to the Property Trustee to exercise its rights
and powers under the Trust Agreement.
8. Under the Delaware Business Trust Act and the Trust Agreement, the
issuance of the Preferred Trust Securities is not subject to preemptive rights.
9. The issuance and sale by the Trust of the Trust Securities, the
execution, delivery and performance by the Trust of the Underwriting Agreement,
the consummation by the Trust of the transactions contemplated thereby and the
compliance by the Trust with its obligations thereunder do not violate (i) any
of the provisions of the Certificate or the Trust Agreement, or (ii) any
applicable Delaware law or Delaware administrative regulation.
10. The Preferred Trust Security Holders (other than those Preferred
Trust Security Holders who reside or are domiciled in the State of Delaware)
will have no liability for income taxes imposed by the State of Delaware solely
as a result of their participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of Delaware.
The opinion expressed in paragraph 3 above is subject, as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
III-5
applicable public policy on the enforceability of provisions relating to
indemnification or contribution.
We consent to your relying as to matters of Delaware law upon this
opinion in connection with the Underwriting Agreement. We also consent to
Pillsbury Winthrop LLP's, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP's and ▇▇▇▇▇▇ ▇▇▇▇ &
Priest LLP's relying as to matters of Delaware law upon this opinion in
connection with opinions to be rendered by them on the date hereof pursuant to
the Underwriting Agreement. Further, we consent to the reliance by The Bank of
New York (in its capacity as Debenture Trustee under the Subordinated Indenture,
as trustee under the Guarantee, and as Property Trustee under the Trust
Agreement) and The Bank of New York (Delaware) (in its capacity as Delaware
Trustee under the Trust Agreement) as to matters of Delaware law upon this
opinion in connection with the matters set forth herein. Except as stated above,
without our prior written consent, this opinion may not be furnished or quoted
to, or relied upon by, any other Person for any purpose.
Very truly yours,
III-6
Schedule IV
[LETTERHEAD OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP]
[Date]
as Representatives of Underwriters named in Schedule II
to the Underwriting Agreement, as herein defined
c/o
Ladies and Gentlemen:
We have acted as General Counsel to TXU Electric Company (the
"Company") in connection with the transactions contemplated by the Underwriting
Agreement dated , 2001 among the Company, [Name of Trust] (the "Trust")
and the Representatives for the Underwriters named therein (the "Underwriting
Agreement"), including, among others, (i) the issuance by the Trust, a statutory
business trust organized under the Delaware Business Trust Act (the "Delaware
Act"), of Preferred Trust Securities (the "Preferred Trust Securities") having
an aggregate liquidation amount of $ ,000,000, (ii) the issuance by the
Company of $ principal amount of its Junior Subordinated Debentures,
Series (the "Debentures") and (iii) the guarantee by the Company of the
Preferred Trust Securities pursuant to a Guarantee Agreement, dated the date
hereof, between the Company and The Bank of New York, as trustee (the
"Guarantee").
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
IV-1
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 trustee under the Indenture as to the due authentication of
the Debentures. In our examination we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents submitted to us as
photostatic or certified copies.
Upon the basis of our familiarity with these transactions and with the
affairs and properties of the Company generally, we are of the opinion that:
1. The Company is a corporation duly authorized, validly existing and
in good standing under the laws of the State of Texas, and has the corporate
power and authority: (a) to execute, deliver and perform its obligations under
the Underwriting Agreement and the Indenture, (b) to issue the Debentures and
the Guarantee and to incur the indebtedness to be evidenced thereby, and (c) to
own its property and assets and to conduct the business which it is now
conducting.
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
3. The Indenture, the Trust Agreement and the Guarantee have been duly
qualified under the Trust Indenture Act.
4. The Debentures and the Indenture have been duly authorized,
executed and delivered by the Company; the Debentures, when issued against
payment therefor as contemplated by the Trust Agreement, will be entitled to the
benefits of the Indenture; and the Debentures (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.
IV-2
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, general principles of equity and an implied covenant of
good faith, fair dealing and reasonableness.
6. The statements made in the Prospectus under the captions
["Description of TXU Capital's Preferred Trust Securities and Common Trust
Securities," "Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the Preferred Trust Securities" and
"Certain Terms of the Junior Subordinated Debentures"], insofar as they purport
to constitute summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in all material
respects.
7. Neither the Company nor the Trust is an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
8. The Trust is duly qualified to transact business in the State of
Texas as a foreign limited liability company. Under Texas law, the liability, if
any, of holders of Preferred Trust Securities for the debts, liabilities and
obligations of the Trust for which they are not otherwise liable by statute or
agreement will be governed by the Delaware Act.
9. Other than as stated in the Registration Statement and the
Prospectus (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;
10. The Registration Statement, as of the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
(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 of 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
IV-3
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.
11. No other approval, authorization, consent or order of any public
board or body (other than in connection or in compliance with the provisions of
the blue-sky laws of any jurisdiction, 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 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 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 6 above. However, our examination of the information relating
to the Company contained in the Registration Statement and the Prospectus and
our discussions did not disclose to us anything which gives us reason to believe
that (except as to financial statements and schedules and other financial and
statistical data and except as to that part of the Registration Statement that
constitutes the 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
IV-4
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; and as to all matters of
Delaware law, we have, with your consent, relied upon the opinion of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., Wilmington, Delaware, special counsel for the Company and
the Trust.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP
By:
-------------------------------
A Partner
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Schedule V
[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
c/o
Ladies and Gentlemen:
We have acted as counsel to TXU Electric Company (the "Company") in
connection with the transactions contemplated by the Underwriting Agreement
dated , 2001 among the Company, [Name of Trust] (the "Trust") and the
Representatives for the Underwriters named therein (the "Underwriting
Agreement"), including, among others, (i) the issuance by the Trust, a statutory
business trust organized under the Delaware Business Trust Act (the "Delaware
Act") of Preferred Trust Securities (the "Preferred Trust Securities") having an
aggregate liquidation amount of $ ,000,000, (ii) the issuance by the Company
of $ principal amount of its Junior Subordinated Debentures, Series
(the "Debentures") and (iii) the guarantee by the Company of the Preferred Trust
Securities pursuant to a Guarantee Agreement, dated the date hereof, between the
Company and The Bank of New York, as trustee (the "Guarantee").
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
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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 Trustee under the Indenture as to the due 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.
Based on the foregoing and subject to the qualifications and
limitations set forth herein, 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, when issued against
payment therefor as contemplated by the Trust Agreement, will be entitled to the
benefits of the Indenture; and the Debentures (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.
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
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creditors generally, general principles of equity and an implied covenant or
good faith, fair dealing and reasonableness.
5. The statements made in the Prospectus under the captions
["Description of TXU Capital's Preferred Trust Securities and Common Trust
Securities," "Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the Preferred Trust Securities" and
"Certain Terms of the Junior Subordinated Debentures"] insofar as they purport
to constitute summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in all material
respects.
6. Neither the Company nor the Trust is an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
7. The Registration Statement as of the Effective Date, and the
Prospectus at the time it was filed with the Commission pursuant to Rule 424
(except for the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein and except for
that part of the Registration Statement that constitutes the 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.
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, 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 Debentures and the issuance by the Company of the Guarantee.
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We herewith confirm as our opinion the statements under the caption
["Material United States Federal Income Tax Matters with Respect to the
Preferred Trust Securities"] in the Prospectus.
In the course of the preparation of the information relating to the
Company contained in the Prospectus (including the 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 the immediately preceding paragraph and in paragraph 5 above. However,
our examination of the information relating to the Company contained in the
Registration Statement and the Prospectus and our discussions did not disclose
to us anything which gives us reason to believe that (except as to financial
statements and schedules and other financial and statistical data and except as
to that part of the Registration Statement that constitutes the 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; and as to all matters of
Delaware law, we have, with your consent, relied upon the opinion of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., Wilmington, Delaware, special counsel for the Company and
the Trust. We believe that you and we are justified in relying on such opinions.
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Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇ & PRIEST LLP
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SCHEDULE VI
[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 transactions contemplated by the Underwriting Agreement
dated , 2001 between TXU Electric Company (the "Company"), [Name of
Trust] (the "Trust") and the Underwriters (the "Underwriting Agreement") in
which (i) the Trust, a statutory business trust organized under the Delaware
Business Trust Act, proposes to issue $ ,000,000 aggregate liquidation
preference amount of its Preferred Trust Securities (the "Preferred Trust
Securities"), (ii) the Company proposes to issue $ principal amount of
its Junior Subordinated Debentures, Series , (the "Debentures") and (iii) the
Company proposes to guarantee the Preferred Trust Securities to the extent
described in the Prospectus. Terms not otherwise defined herein are used with
the meanings ascribed to them in the Underwriting Agreement.
We are members of the New York Bar and do not hold ourselves out as
experts on the laws of the State of Texas. We have, with your consent, relied
upon an opinion of even date herewith addressed to you by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, Dallas, Texas, General Counsel for the Company, as to the
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matters covered in such opinion relating to Texas law. We have reviewed such
opinion and believe that it is satisfactory and that you and we are justified in
relying thereon. We understand that you are relying, for all matters of Delaware
law, upon an opinion of even date herewith addressed to you by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& Finger, P.A., Delaware Counsel for the Company.
We have, in addition, examined the documents described in the list of
closing papers as having been delivered to you at the closing and such other
documents and satisfied ourselves as to such other matters as we have deemed
necessary in order to enable us to express this opinion. We have not examined
the Debentures, except specimens thereof, and have relied upon a certificate of
the trustee under the Indenture as to the due authentication of the Debentures.
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, when issued against
payment therefor as contemplated by the Trust Agreement, will be entitled to the
benefits of the Indenture; and the Debentures (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.
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,
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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.
5. The statements made in the Prospectus under the captions
["Description of TXU Capital's Preferred Trust Securities and Common Trust
Securities," "Description of the Junior Subordinated Debentures," "Description
of the Guarantee", "Certain Terms of the Preferred Trust Securities", and
"Certain Terms of the Junior Subordinated Debentures"], insofar as they purport
to constitute summaries of the terms of the documents referred to therein,
constitute accurate summaries of the terms of such documents in all material
respects.
6. 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
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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.
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,
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