Exhibit 1(a)
DEALER MANAGER AGREEMENT
November __, 1995
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
Xxxxxxx Xxxxx World Headquarters
South Tower
World Financial Center
New York, New York 10281-1329
XXXXXXX, SACHS & CO.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX BROTHERS INC.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TU Electric Capital II (the "Trust"), a statutory
business trust organized under the Delaware Business Trust Act
(the "Delaware Act") proposes to issue its Trust Originated
Preferred Securities (the "Preferred Securities") in exchange for
up to $350,230,874 principal amount of Texas Utilities Electric
Company (the "Company") Junior Subordinated Debentures, due
September 30, 2030 ("Debentures"). The Company proposes to offer
to exchange for any and all of its 5,000,000 outstanding
Depositary Shares, each representing 1/4 share of $8.20
Cumulative Preferred Stock ("Depositary Shares") for Preferred
Securities applicable to the series of Depositary Shares to be
exchanged or cash only in an amount applicable to the series of
Depositary Shares to be exchanged. The Preferred Securities will
be guaranteed by the Company to the extent described in the
Prospectus (as hereinafter defined) (the "Guarantee"). The offer
to exchange Preferred Securities or cash only for Depositary
Shares described above is herein referred to as the "Exchange
Offer" and any exchange of Preferred Securities for Depositary
Shares pursuant to the Exchange Offer is herein referred to as
an "Exchange".
Each of the Company and the Trust hereby confirms its
agreement with Xxxxxxx Xxxxx & Co. of Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxxxxx , Xxxxx &
Co. ("Goldman"), Xxxxxx Brothers Inc. ("Xxxxxx") and Xxxxx Xxxxxx
Inc. ("Xxxxx Xxxxxx", together with Xxxxxxx Xxxxx, Goldman and
Xxxxxx, the "Co-Dealer Managers") as follows:
1. Registration Statement, Prospectus and Offering
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Materials. The Company and the Trust have prepared and filed
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with the Securities and Exchange Commission (the "Commission"),
under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder
(collectively, the "Securities Act"), a registration statement on
Form S-4 covering the registration of the Preferred Securities,
the Guarantee and the Debentures, including the related
preliminary prospectus (the "prospectus"), and will prepare and
file, on or prior to the effective date of such registration
statement, amendments to such registration statement, including a
final prospectus. Such registration statement, including the
exhibits thereto and any documents incorporated by reference
therein, as amended at the time it becomes effective or as
thereafter amended or supplemented from time to time, is herein
called the "Registration Statement". The final prospectus
included in the Registration Statement (including any documents
incorporated in the prospectus by reference) is herein called the
"Prospectus", except that if the final prospectus furnished to
the Co-Dealer Managers for use in connection with the Exchange
Offer differs from the prospectus set forth in the Registration
Statement (whether or not such prospectus is required to be filed
pursuant to Rule 424(b)), the term "Prospectus" shall refer to
the final prospectus furnished to the Co-Dealer Managers for such
use. The terms "supplement" and "amendment" or "amend" as used
herein with respect to the Prospectus shall include all documents
deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Prospectus and prior to the
termination of the Exchange Offer by the Company with the
Commission pursuant to the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx").
The Registration Statement, Prospectus and the related
letters from the Co-Dealer Managers to securities brokers,
dealers, commercial banks, trust companies and other nominees,
letters to beneficial owners of Depositary Shares, letters of
transmittal (the "Letters of Transmittal"), notices of guaranteed
delivery (the "Notices of Guaranteed Delivery") and any newspaper
announcements, press releases and other offering materials and
information the Company may use or prepare, approve or authorize
for use in connection with the Exchange Offer, as amended or
supplemented from time to time, are herein collectively referred
to as the "Offering Materials".
2. Exchange Offer; Agreement to Act as Co-Dealer Managers.
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(a) The Company and the Trust intend to commence the Exchange
Offer as soon as practicable after the Registration Statement
becomes effective under the Securities Act by publicly announcing
its commencement and by mailing, or causing to be mailed on its
behalf, copies of the Prospectus, the related Letters of
Transmittal and such of the other Offering Materials as is
required or as the Company elects to each holder of Depositary
Shares (the date of the commencement of such distribution being
herein called the "Commencement Date").
(b) The Company and the Trust hereby retain the
Co-Dealer Managers to advise them with respect to the terms
and timing of the Exchange Offer and to assist them in the
preparation of the Offering Materials and retain and
authorize the Co-Dealer Managers to act as co-dealer
managers and to assist the Company with the solicitation of
Exchanges (each a "Solicitation" and collectively the
"Solicitations"). On the basis of the representations,
warranties and agreements of the Company and the Trust
herein contained and subject to and in accordance with the
terms and conditions hereof and of the Offering Materials,
the Co-Dealer Managers agree to advise the Company and the
Trust with respect to the terms and timing of the Exchange
Offer and to act as co-dealer managers in connection with
the Exchange Offer and to assist the Company with the
Solicitations. The Co-Dealer Managers agree to use their
reasonable best efforts to solicit Exchanges.
(c) The Company shall furnish the Co-Dealer Managers,
or cause the transfer agent or registrar for the Depositary
Shares (respectively, the "Transfer Agent" and "Registrar")
to furnish the Co-Dealer Managers, as soon as practicable
after the date hereof (to the extent not previously
furnished), with cards or lists in reasonable quantities or
copies thereof showing the names of persons who were the
holders of record or, to the extent available to the
Company, the beneficial owners of the Depositary Shares as
of a recent date, together with their addresses, and the
number of shares of Depositary Shares held by them.
Additionally, the Company shall use its best efforts to
update, or to cause the Transfer Agent or Registrar to
update, such information from time to time during the term
of this Agreement as may be reasonably requested by the
Co-Dealer Managers. Except as otherwise provided herein,
the Co-Dealer Managers agree to use such information only in
connection with the Solicitations. The Co-Dealer Managers
shall act hereunder as independent contractors and nothing
herein contained shall make the Co-Dealer Managers agents of
the Trust or the Company in connection with any
Solicitation. Nothing contained in this Agreement shall
constitute the Co-Dealer Managers partners of or joint
venturers with the Trust or the Company.
(d) The Trust and the Company authorize the Co-Dealer
Managers to use the Offering Materials in connection with
the Solicitations and for such period of time as any
Offering Materials are required by law to be delivered in
connection therewith. The Co-Dealer Managers shall not have
any obligation to cause any Offering Materials to be
transmitted generally to the holders of the Depositary
Shares. The Co-Dealer Managers agree not to give any
written information and not to make any representations to
holders of the Depositary Shares in connection with any
Solicitation other than as contained in the Offering
Materials.
(e) The Trust and the Company authorize the Co-Dealer
Managers to communicate with any information agent (the
"Information Agent") or exchange agent (the "Exchange
Agent") appointed by the Company to act in such capacity in
connection with the Exchange Offer with respect to matters
relating to the Exchange Offer.
(f) The Trust and the Company agree that any reference
to any Co-Dealer Manager in any Offering Materials or in any
newspaper announcement or press release or other document or
communication is subject to such Co-Dealer Manager's prior
consent, which consent shall not be unreasonably withheld.
3. Compensation. (a) The Company hereby agrees to pay to
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the Co-Dealer Managers for services rendered and to be rendered
by them in connection with the Exchange Offer an aggregate fee
(the "Management Fee") equal to $.125 per share of Depositary
Shares accepted in the Exchange Offer. The Management Fee shall
be paid only if the Exchange Offer is consummated, and shall be
paid within one week of the consummation of the Exchange Offer.
In addition, the Company agrees to reimburse each Co-Dealer
Manager directly for all of its reasonable out-of-pocket
expenses, including, without limitation, the reasonable fees and
expenses of Winthrop, Stimson, Xxxxxx & Xxxxxxx ("Counsel for the
Co-Dealer Managers"). Fees, if any, related to all other
transactions with respect to the Depositary Shares not
contemplated hereby will be negotiated in good faith by the
parties hereto at the time thereof.
(b) The Company agrees to pay, or cause to be paid to,
each soliciting dealer (including any Co-Dealer Manager
acting as a soliciting dealer) whose name has been inserted
in the space provided in the Letter of Transmittal for that
purpose a fee (the "Soliciting Dealer Fee") equal to $.50
per Depositary Share validly tendered, accepted by the
Company and exchanged for Preferred Securities or $.375 per
Depositary Share validly tendered, accepted by the Company
and exchanged for cash only, in each case, pursuant to the
Exchange Offer; provided, however, that no such fee shall
be paid with respect to Depositary Shares tendered, directly
or indirectly, by soliciting dealers for their own account
and such fee shall not be remitted, in whole or in part,
to the beneficial owner of such Depositary Shares. The
Soliciting Dealer Fee shall be payable to the soliciting
dealers within one week of the consummation of the Exchange
Offer with respect to both series.
4. Certain Covenants of the Trust and the Company. Each
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of the Company and the Trust jointly and severally covenants with
the Co-Dealer Managers:
(a) To use its best efforts to cause the Registration
Statement, including any post-effective amendment thereto,
to become effective and will notify the Co-Dealer Managers
immediately and, if requested by any Co-Dealer Manager, will
confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall have become
effective, or any supplement to the Prospectus or any
amended Prospectus or any amended or additional Offering
Materials shall have been filed, (ii) of the receipt of any
comments from the Commission relating to the Exchange Offer,
(iii) of any request by the Commission to amend the
Registration Statement or amend or supplement the Prospectus
or the other Offering Materials or for additional
information relating to the Exchange Offer and (iv) of
(A) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement
or (B) the issuance by the Commission of any order
preventing or suspending the use of any of the Offering
Materials or (C) the suspension of the qualification of the
Preferred Securities for offering or sale in connection with
the Exchange Offer in any jurisdiction, (D) the institution
or threatening of any proceedings for any of such purposes
or (E) the occurrence of any event which could cause the
Company to withdraw, rescind, terminate or modify the
Exchange Offer or would permit the Company to exercise any
right not to accept the Depositary Shares tendered pursuant
to the Exchange Offer. The Company and the Trust will use
their reasonable best efforts to prevent the issuance of any
such stop order, the issuance of any order preventing or
suspending such use and the suspension of any such
qualification and, if any such order is issued or
qualification suspended, to obtain the lifting of such order
or suspension at the earliest practicable time.
(b) Prior to the termination of the Exchange Offer,
before amending or supplementing the Registration Statement
or the Prospectus, to furnish copies of drafts to, and
consult with, the Co-Dealer Managers and their counsel
within a reasonable time in advance of filing with the
Commission of any amendment or supplement to the
Registration Statement, the Prospectus or the other Offering
Materials. Neither the Company nor the Trust shall file any
such amendment or supplement to which any Counsel for the
Co-Dealer Managers shall reasonably object; provided,
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however, that the foregoing shall not apply to any of the
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Company's filings with the Commission required to be filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, copies of which such filings the Company will
cause to be delivered to each Co-Dealer Manager promptly
after being transmitted for filing with the Commission.
(c) To furnish promptly to each Co-Dealer Manager,
without charge, one signed copy of the Registration
Statement, all amendments thereto and any other filing with
the Commission in connection with the Exchange Offer,
whether filed before or after the Registration Statement
becomes effective.
(d) To furnish promptly to each Co-Dealer Manager,
without charge, from time to time until the effective date
of the Registration Statement, as many copies of each
preliminary prospectus as the Co-Dealer Managers may
reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the Securities
Act and the Exchange Act. The Company will furnish promptly
to each Co-Dealer Manager, without charge, as soon as the
Registration Statement shall have become effective and
during the period mentioned in the second sentence of
Section 4(e) below such number of copies of the Prospectus
and the other Offering Materials (as supplemented or
amended) as such Co-Dealer Manager may reasonably request
and will cause all amendments and supplements filed with the
Commission to be distributed to holders of Depositary Shares
as may be required by the Securities Act and the Exchange
Act.
(e) To comply in all material respects with the
Securities Act, the Exchange Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), in
connection with the Offering Materials, the Exchange Offer
and the transactions contemplated hereby and thereby, as
applicable. If at any time when the Prospectus is required
by the Securities Act or Exchange Act to be delivered in
connection with any Solicitation or Exchange any event shall
occur or condition shall exist as a result of which it is
necessary, in the opinion of Counsel for the Co-Dealer
Managers or counsel for the Company, to amend the
Registration Statement or amend or supplement the Prospectus
or any other Offering Materials in order that the Prospectus
or such other Offering Materials will not include an untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements in the
Prospectus or such other Offering Materials, in the light of
the circumstances under which they were made, not misleading
or if, in the opinion of either such counsel, it shall be
necessary to amend the Registration Statement or amend or
supplement the Prospectus or any other Offering Materials to
comply with the requirements of the Securities Act or
Exchange Act, the Trust will promptly prepare, file with the
Commission, subject to Section 4(b) of this Agreement, and
furnish, at its own expense, to each Co-Dealer Manager and
to the dealers (whose names and address will be furnished to
the Company by the Co-Dealer Managers) to which Preferred
Securities may have been exchanged, such amendment or
supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement
or the Prospectus or such other Offering Materials comply
with such requirements.
(f) To endeavor, in cooperation with the Co-Dealer
Managers, to qualify the Preferred Securities for offering
and sale in connection with the Exchange Offer under the
applicable securities or Blue Sky laws of such jurisdictions
as the Company and the Trust may elect and to maintain such
qualifications in effect for such time as may be required
for the consummation of the Exchange Offer; provided,
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however, that neither the Company nor the Trust shall be
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obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not
otherwise so subject or to meet any other requirements
deemed by the Company or the Trust to be unduly burdensome;
provided further that the Co-Dealer Managers shall not be
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obligated to solicit tenders in jurisdictions where the
Preferred Securities are not qualified for offer and sale.
The Company and the Trust will file such statements and
reports as may be required by the laws of each jurisdiction
in which the Preferred Securities have been qualified as
above provided.
(g) To make generally available to its security
holders as soon as practicable an earnings statement of the
Company covering a twelve-month period beginning on the
first day of the first full fiscal quarter after the date of
this Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(h) To use its best efforts to effect the listing of
the Preferred Securities on the New York Stock Exchange
("NYSE"), subject to official notice of issuance, as soon as
practicable after the date hereof.
(i) To timely file any report or other document
required to be filed by the Company or the Trust with the
Commission pursuant to Section 13, 14 or 15 of the Exchange
Act during the period of time referred to in the second
sentence of Section 4(e) hereof.
(j) To pay all costs and expenses incurred in
connection with the performance of its obligations in
connection with this Agreement and the Solicitations
including, without limitation, (i) the preparation, printing
and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and
as amended, the preliminary prospectuses, the Prospectus and
the other Offering Materials and any amendments or
supplements to any of the foregoing, and the cost of
furnishing copies thereof to the Co-Dealer Managers,
(ii) the preparation and distribution of this Agreement,
certificates for the Preferred Securities and any Blue Sky
surveys (including counsel fees not to exceed $5,000) and
the printing of certificates for the Preferred Securities,
(iii) the distribution of the Offering Materials to the
holders of the Depositary Shares, (iv) the fees and
disbursements of counsel to the Company and the Trust,
Counsel for the Co-Dealer Managers and the Company's and the
Trust's accountants, (v) the qualification of the Preferred
Securities under the applicable securities laws in
accordance with Section 4(f) and any filing for review of
the Exchange Offer with the NASD (including filing fees and
fees and disbursements of Counsel for the Co-Dealer Managers
in connection with such filing with the NASD), (vi) the fees
and expenses of the Transfer Agent, the Registrar, the
Trustees of the Trust (the "Trustees"), the Indenture
Trustee (as defined herein), the Information Agent and the
Exchange Agent and (vii) all other costs and expenses
incident to the Solicitations incurred by the Trust and the
Company and its subsidiaries. The Company agrees to pay all
of the aforementioned costs and expenses whether or not the
Exchange Offer is consummated.
(k) To advise or cause the Exchange Agent to advise
the Co-Dealer Managers at 5:00 P.M., New York City time, or
as promptly as practicable thereafter, daily (or more
frequently if requested), by telephone or facsimile
transmission, as of 4:00 P.M. on such day with respect to
Depositary Shares of each series that have been tendered as
follows: (i) the number of Depositary Shares of each series
validly tendered represented by certificates physically held
by the Exchange Agent (or for which the Exchange Agent has
received confirmation of receipt of book-entry transfer of
such Depositary Shares into the Exchange Agent's account at
a Book-Entry Transfer Facility (as defined in the
Prospectus) pursuant to the procedures set forth in the
Exchange Offer) on such day; (ii) the number of Depositary
Shares of each series represented by Notices of Guaranteed
Delivery on such day; (iii) the number of Depositary Shares
of each series properly withdrawn on such day; and (iv) the
cumulative number of Depositary Shares of each series in
categories (i) through (iii) above.
On the day following such oral communication, the Company
shall furnish or cause the Exchange Agent to furnish to the
Co-Dealer Managers a written report confirming the above
information which has been communicated orally. The Company
shall furnish or cause the Exchange Agent to furnish to the
Co-Dealer Managers such reasonable information on the
tendering holders of Depositary Shares as may be requested
from time to time.
(l) To give the Co-Dealer Managers notice of any
change of the expiration time of the Exchange Offer (the
"Expiration Time").
5. Representations and Warranties of the Company and the
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Trust. Each of the Company and the Trust jointly and severally
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represents and warrants to and agrees with each of the Co-Dealer
Managers that:
(a) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 of the
Securities Act, will comply when so filed, in all material
respects, as to form with the Securities Act and the
Exchange Act; the Registration Statement at the time it
becomes effective and the Prospectus and any other Offering
Materials, on the Commencement Date and on the date on which
the Company commences delivery of the Preferred Securities
for exchange of the Depositary Shares of each series
pursuant to the Exchange Offer (such date, the "Exchange
Date"), will comply, in all material respects, as to form
with the Securities Act and the Exchange Act; the
Registration Statement when it becomes effective will not
contain, and the Registration Statement, as amended, if
applicable, when such amendment becomes effective will not
contain, any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
as of the Commencement Date and the Exchange Date, none of
the Prospectus or the other Offering Materials will contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, except that the representations
and warranties set forth in this Section 5(a) do not apply
(A) to statements or omissions made based upon and in
conformity with information supplied in writing by a
Co-Dealer Manager expressly for use in the Registration
Statement, Prospectus, or any other Offering Materials or
(B) to that part of the Registration Statement that
constitutes the Statements of Eligibility and Qualification
on Form T-1 (the "Forms T-1") under the Trust Indenture Act
of The Bank of New York as trustee (the "Indenture Trustee")
under the Indenture (as defined herein), as property trustee
under the Trust Agreement (as defined herein) and as trustee
under the Guarantee.
(b) The Company has the corporate power and authority
to execute, deliver and perform its obligations under this
Agreement, the Trust Agreement, the Indenture and the
Guarantee; and this Agreement has been duly authorized,
executed and delivered by the Company. The Trust has the
business trust power and authority to execute, deliver and
perform its obligations under this Agreement; and this
Agreement has been duly authorized, executed and delivered
by the Trust.
(c) The Preferred Securities to be issued pursuant to
the Exchange Offer will be duly authorized by the Trust's
Amended and Restated Trust Agreement (the "Trust Agreement")
and, when issued in exchange for Debentures pursuant to the
Exchange Offer, will be validly issued and (subject to the
terms of the Trust Agreement) fully paid and nonassessable
undivided beneficial interests in the assets of the Trust,
not subject to any preemptive or similar rights, and will
conform in all material respects to all statements relating
thereto contained in the Prospectus. Holders of Preferred
Securities will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit.
(d) The Trust Agreement and the Guarantee have been
duly authorized by the Company and, as of the Exchange Date,
will have been duly executed and delivered by the Company.
Assuming due authorization, execution and delivery of the
Trust Agreement by the Trustees, the Trust Agreement will,
as of the Exchange Date, be a valid and binding obligation
of the Company and the Trustees, enforceable against the
Company and the Trustees in accordance with its terms,
subject to applicable bankruptcy, insolvency and other laws
affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
As of the Exchange Date, the Guarantee will be a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies
of creditors generally and of general principles of equity.
(e) The Indenture between the Company and the
Indenture Trustee (including the related supplemental
indenture governing the Debentures, the "Indenture"), will
be duly qualified under the Trust Indenture Act and,
assuming due authorization, execution and delivery of the
Indenture by the Indenture Trustee and upon execution and
delivery by the Company, will be enforceable against the
Company in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies
of creditors generally and of general principles of equity.
(f) The Debentures to be exchanged for Preferred
Securities and held in the Trust as trust assets in
connection with the Exchange Offer have been duly and
validly authorized, and assuming due authorization,
execution and delivery of the Indenture by the Indenture
Trustee, when executed and authenticated in accordance with
the provisions of the Indenture and delivered to the Trust
pursuant to the terms of the Exchange Offer, will be
entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company enforceable against
the Company in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights
and remedies of creditors generally and of general
principles of equity.
(g) The Company is a public utility corporation duly
authorized by its articles of incorporation, as amended, to
conduct the business which it is now conducting, is subject,
as to rates and services, to the jurisdiction of certain
authorities, as set forth in the Prospectus, and holds valid
and subsisting franchises, licenses and permits authorizing
it to carry on the utility business in which it is engaged.
(h) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Act, is and will be treated as a "grantor trust"
for Federal income tax purposes under existing law, has the
business trust power and authority to conduct its business
as presently conducted and as described in the Prospectus,
has been duly authorized to do business in the State of
Texas as a foreign limited liability company and is not
required to be authorized to do business in any other
jurisdiction.
(i) The execution and delivery by the Company and the
Trust of, and the performance by the Company and the Trust
of their obligations under, this Agreement, the execution
and delivery by the Company of, and the performance by the
Company of its obligations under, the Trust Agreement, the
Indenture and the Guarantee, the issuance and delivery by
the Trust of the Preferred Securities and the consummation
of the Exchange Offer and the fulfillment of the terms
herein contemplated will not contravene any provision of
applicable law or the articles of incorporation or by-laws
of the Company or the declaration of trust of the Trust or
any agreement or other instrument binding upon the Trust or
the Company or any of its subsidiaries or any judgment,
order or decree of any governmental body, agency or court
having jurisdiction over the Trust or the Company or any of
its subsidiaries, except for such contraventions that would
not, individually or in the aggregate, have a material
adverse effect on the financial condition or results of
operations of the Company and its subsidiaries, taken as a
whole, or the Trust and no consent, approval or
authorization or order of, or qualification with, any
governmental body or agency is required for the performance
by the Company and the Trust of their obligations under this
Agreement, the issuance and delivery of the Preferred
Securities and the consummation of the Exchange Offer,
except such as will be obtained under the Securities Act,
the Exchange Act or the Trust Indenture Act and as may be
required by the securities or Blue Sky laws of the various
states or the securities laws of non-U.S. jurisdictions in
connection with the Exchange Offer.
(j) Neither the Company nor the Trust is, or after
giving effect to the consummation of the Exchange Offer,
will be, and neither the Company nor the Trust is directly
or indirectly controlled by, or acting on behalf of any
person which is, an investment company within the meaning of
the Investment Company Act of 1940, as amended.
6. Indemnification.
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(a) Each of the Company and the Trust agrees to hold
harmless and indemnify you and your affiliates and any
officer, director, employee or agent of you or any such
affiliates and any person controlling (within the meaning of
Section 20(a) of the Exchange Act or Section 15 of the
Securities Act you or any of such affiliates (each, a
"Co-Dealer Manager Indemnitee") from and against any and
all losses, claims, damages or liabilities, joint or
several, and expenses whatsoever to which they may
become subject under any statute or common law and shall
reimburse you and each Co-Dealer Manager Indemnitee for any
and all legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred in
connection with investigating any such losses, claims,
damages or liabilities or in connection with defending any
action, insofar as such losses, claims, damages,
liabilities, expenses or actions (A) arise out of or are
based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Offering
Materials or any other solicitation material used by the
Company or the Trust or the omission or alleged omission to
state in any such document a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading (other than statements or omissions
made in reliance upon and in conformity with information
furnished by you in writing to the Company or the Trust
expressly for use therein), (ii) any withdrawal or
termination by the Company or the Trust of, or failure by
the Company or the Trust to make or consummate, the Exchange
Offer, (iii) any actions taken or omitted to be taken by you
or any other Co-Dealer Manager Indemnitee with the consent
of the Company and the Trust or in conformity with actions
taken or omitted to be taken by the Company or the Trust or
(iv) any breach by the Company or the Trust of any
representation or warranty, or any failure by the Company or
the Trust to comply with any agreement or covenant,
contained in this Agreement or (B) arise out of, relate to
or are in connection with or are alleged to arise out of,
relate to or be in connection with the Exchange Offer, any
of the other transactions contemplated by the Offering
Materials or the performance of your services as Co-Dealer
Manager with respect to the Exchange Offer. However,
neither the Company nor the Trust will be obligated to
indemnify you or any other Co-Dealer Manager Indemnitee for
any loss, claim, damage, liability or expense pursuant to
clause (B) of the preceding sentence which has been
determined in a final judgment by a court of competent
jurisdiction to have resulted directly from willful
misconduct or negligence on the part of you or any other Co-
Dealer Manager Indemnitee.
(b) You agree to indemnify, defend and hold harmless
the Company and the Trust, their officers and directors, and
each person who controls the Company or the Trust (within
the meaning of Section 20(a) of the Exchange Act or Section
15 of the Securities Act) from and against any and all losses,
claims, damages or liabilities, joint or several, to which
they or any of them may become subject under any statute
or common law and shall reimburse each of them for any
legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred
by them in connection with investigating any such losses,
claims, damages or liabilities or in connection with
defending any actions, insofar as such losses, claims,
damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Offering
Materials, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon and in
conformity with information furnished by you in writing to
the Company or the Trust expressly for use therein. Your
agreement to so indemnify contained in this subparagraph (b)
shall remain operative and in full force and effect
regardless of any termination of this Agreement or of any
investigation made by or on behalf of the Company or the
Trust, their directors or their officers, or by you or any
other Co-Dealer Manager Indemnitee, and shall survive the
termination of the Exchange Offer.
(c) The Company and the Trust and each Co-Dealer
Manager Indemnitee shall, upon the receipt of notice of the
commencement of any action in respect of which indemnity may
be sought on account of any indemnity agreement contained
herein, promptly give written notice of the commencement
thereof to the party or parties against whom indemnity shall
be sought hereunder, but the omission so to notify such
indemnifying party of any such action shall not relieve such
indemnifying party from any liability which it may have to
the indemnified party under this paragraph 6 except to the
extent that it has been prejudiced in any material respect
by such failure and in any event shall not relieve the
Company or the Trust from any other obligation or liability
which they may have to such Co-Dealer Manager Indemnitee
otherwise than on account of such indemnity agreement. In
case such notice of any such action shall be so given, such
indemnifying party shall be entitled to participate at its
own expense in the defense, or, if it so elects, to assume
the defense of such action, in which event such defense
shall be conducted by counsel chosen by such indemnifying
party and satisfactory to the indemnified party or parties
who shall be defendant or defendants in such action, and
such defendant or defendants shall bear the fees and
expenses of any additional counsel retained by them; but if
the indemnifying party shall elect not to assume the defense
of such action, such indemnifying party will reimburse such
indemnified party or parties for the reasonable fees and
expenses of any counsel retained by them; provided, however,
if the defendants in any such action include both an
indemnified party and the indemnifying party and counsel for
the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the
representation by such counsel of both the indemnifying
party and the indemnified party, the indemnified party or
parties shall have the right to select separate counsel,
satisfactory to the indemnifying party, to participate in
the defense of such action on behalf of such indemnified
party or parties (it being understood, however, that the
indemnifying party shall not be liable for the expenses of
more than one separate counsel representing the indemnified
parties who are parties to such action).
(d) If the indemnification provided for in sub-
paragraph (a) or (b) above shall be unenforceable under
applicable law, the indemnifying party agrees to contribute
to such indemnified party with respect to any and all
losses, claims, damages, liabilities and expenses for which
each such indemnification provided for in subparagraph (a)
or (b) above shall be unavailable, in such proportion as
shall be appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party
on the other in connection with the actions, statements or
omissions which have resulted in such losses, claims,
damages, liabilities and expenses, as well as any other
relevant equitable considerations; provided, however, that
no indemnified party guilty of fraudulent misrepresentation
shall be entitled to contribution from any indemnifying
party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by
such indemnifying party or the indemnified party and each
such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such
untrue statement or omission. Each of the Company and the
Trust and you agree that it would not be just and equitable
if contributions pursuant to this subparagraph (d) were to
be determined by any method of allocation which does not
take account of the equitable considerations referred to
above.
7. Conditions to Co-Dealer Managers' Obligations. The
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obligations of the Co-Dealer Managers hereunder are subject as of
the Commencement Date and as of the Exchange Date to the accuracy
of the representations and warranties of the Company and the
Trust contained herein or in certificates of any officer of the
Company or any trustee of the Trust delivered pursuant to the
provisions hereof, to the performance, in all material respects,
by the Company and the Trust of their obligations hereunder to be
performed, and the following additional conditions:
(a) On the Commencement Date and the Exchange Date,
the Registration Statement shall have become effective under
the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending
before or, to the Company's or the Trust's knowledge,
threatened by the Commission.
(b) On the Commencement Date and the Exchange Date,
there shall not have been since the respective date as of
which information is given in the Registration Statement,
any material adverse change in the business, property or
financial condition of the Company.
(c) The Co-Dealer Managers shall have received on the
Exchange Date and the Commencement Date a certificate, dated
such date and signed by an executive officer of the Company,
to the effect set forth in clause (b) above and to the
effect that the representations and warranties of the
Company contained in this Agreement are true and correct in
all material respects as of such date and that the Company
has complied in all material respects with all of the
agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied on or
before such date. The officer signing and delivering such
certificate may rely upon the best of such officer's
knowledge as to proceedings threatened.
(d) On the Commencement Date and the Exchange Date,
there shall not have been since the respective date as of
which information is given in the Registration Statement,
any material adverse change, in the financial condition of
the Trust.
(e) The Co-Dealer Managers shall have received on the
Commencement Date and the Exchange Date a certificate, dated
such date and signed by a trustee of the Trust, to the
effect set forth in clause (d) above and to the effect that
the representations and warranties of the Trust contained in
this Agreement are true and correct in all material respects
as of such date and that the Trust has complied in all
material respects with all of the agreements and satisfied
in all material respects all of the conditions on its part
to be performed or satisfied on or before such date. The
person signing and delivering such certificate may rely upon
the best of such person's knowledge as to proceedings
threatened.
(f) On the Commencement Date and the Exchange Date,
the Co-Dealer Managers shall have received a signed opinion
of Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, L.L.P., general counsel
for the Company, dated as of such date, to the effect that
(it being understood that certain of the opinions and
assumptions therein set forth below will be appropriate only
in one or the other of such opinions):
(i) [The Company is a public utility
corporation duly authorized by its articles
of incorporation, as amended, to conduct the
business which it is now conducting, is
subject, as to rates and services, to the
jurisdiction of certain authorities, as set
forth in the Prospectus, and holds valid and
subsisting franchises, licenses and permits
authorizing it to carry on the utility
business in which it is engaged.
(ii) this Agreement, the Trust
Agreement, the Indenture, the Debentures and
the Guarantee have been duly authorized,
executed and delivered by the Company;
(iii) the Indenture has been duly
qualified under the Trust Indenture Act and,
assuming due authorization, execution and
delivery of the Indenture by the Company, the
Indenture will be enforceable against the
Company in accordance with its terms, subject
to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and
other laws affecting the rights and remedies
of creditors generally and of general
principles of equity;
(iv) assuming due authorization,
execution and delivery of the Debentures by
the Company and due authorization, execution
and delivery of the Indenture by the Company
and the Indenture Trustee, the Debentures
when executed and authenticated in accordance
with the provisions of the Indenture and
delivered pursuant to the terms of the
Exchange Offer will be entitled to the
benefits of the Indenture and will be valid
and binding obligations of the Company
enforceable against the Company in accordance
with their terms, subject to the effect of
bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws
affecting the rights and remedies of
creditors generally and of general principles
of equity;
(v) assuming due authorization,
execution and delivery of the Guarantee by
the Company, the Guarantee will be
enforceable against the Company in accordance
with its terms, subject to the effect of
bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws
affecting the rights and remedies of
creditors generally and of general principles
of equity;
(vi) the statements made in the
Prospectus under the captions "Description of
the Preferred Securities," "Description of
the Junior Subordinated Debentures," and
"Description of the Guarantee", insofar as
such statements constitute summaries of the
legal matters or documents referred to
therein, are accurate in all material
respects;
(vii) other than as stated in the
Registration Statement and the Prospectus,
there are no material pending legal
proceedings to which the Company is a party
or of which property of the Company is the
subject which depart from the ordinary
routine litigation incident to the kind of
business conducted by the Company, and to our
best knowledge no such proceedings are con-
templated;
(viii) neither the Company nor the
Trust is, or after giving effect to the
consummation the Exchange Offer, will be, and
neither the Company nor the Trust is directly
or indirectly controlled by, or acting on
behalf of any person which is, an investment
company within the meaning of the Investment
Company Act of 1940, as amended;
(ix) no other approval, authorization,
consent or order of any public board or body
(other than in connection or in compliance
with the provisions of the blue-sky laws of
any jurisdiction) is legally required for the
authorization of the issue and sale by the
Company of the Debentures and the Guarantee
under this Agreement; and
(x) such counsel (1) has no reason to
believe that (except for financial statements
and schedules and financial and statistical
data as to which such counsel need not
express any belief and except for that part
of the Registration Statement that
constitutes the Forms T-1) (i) the
Registration Statement, as of its effective
date, included an untrue statement of a
material fact or omitted to state a material
fact required to be stated therein or
necessary to make the statements therein not
misleading or (ii) that the Prospectus or the
Prospectus as it may have been amended or
supplemented prior to the date of such
counsel's opinion (except as aforesaid),
included or includes an untrue statement of a
material fact or omitted or omits to state a
material fact necessary in order to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading; the Registration Statement has
become and is effective under the Securities
Act, and (2) is of the opinion that the
Registration Statement and Prospectus as they
may have been amended and supplemented prior
to the date of such counsel's opinion (except
as aforesaid), as of their respective
effective or issue dates, comply as to form
in all material respects with the Securities
Act.
In rendering such opinion, such counsel may rely as to
(i) certain matters of fact on certificates of officers of
the Company and of public officials and (ii) all matters of
New York law on the opinion of Xxxx & Priest LLP delivered
pursuant to Section 7(h) hereof and may state that such
counsel expresses no opinion as to the laws of any
jurisdiction other than the State of Texas and the federal
law of the United States.
With respect to paragraph (x) above, such counsel may
state that it has not independently verified the accuracy,
completeness or fairness of the statements made or included
or incorporated by reference therein and takes no
responsibility therefor and that such opinion is based upon
such counsel's examination of the Registration Statement,
the Prospectus as amended or supplemented and any documents
incorporated by reference thereto, its investigations made
in connection with the preparation of the Registration
Statement and Prospectus and its participation in
conferences with certain officers and employees of the
Company and with representatives of Deloitte & Touche LLP
and any others referred to in such opinion.
(g) On the Commencement Date and the Exchange Date,
the Co-Dealer Managers shall have received a signed opinion
of Xxxxxxxx, Xxxxxx & Finger, Delaware counsel for the
Company, dated as of such date, to the effect that:
(i) the Trust has been duly organized
and is validly existing in good standing as a
business trust under the Delaware Act and has
the business trust power and authority to
conduct its business as described in the
Prospectus;
(ii) assuming due authorization,
execution and delivery of the Trust Agreement
by the Company and the Trustees, the Trust
Agreement is a legal, valid and binding
agreement of the Company and the Trustees,
enforceable against the Company and the
Trustees in accordance with its terms,
subject to the effect of bankruptcy,
insolvency, reorganization, receivership,
fraudulent conveyance, moratorium and other
laws affecting the rights and remedies of
creditors generally as from time to time in
effect, general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at
law), and considerations of public policy or
the effect of applicable law relating to
fiduciary duties;
(iii) under the Trust Agreement and the
Delaware Act, the execution and delivery of
this Agreement by the Trust, and the
performance by the Trust of its obligations
hereunder, have been duly authorized by all
requisite business trust action on the part
of the Trust;
(iv) the Preferred Securities have been
duly authorized by the Trust Agreement and
are duly and validly issued and, subject to
the terms of the Trust Agreement, fully paid
and nonassessable beneficial interests in the
Trust. The holders of Preferred Securities
will be, subject to the terms of the Trust
Agreement, entitled to the same limitation of
personal liability extended to stockholders
of private corporations for profit organized
under the General Corporation Law of the
State of Delaware; and
(v) under the Trust Agreement and the
Delaware Act, the issuance of the Preferred
Securities is not subject to preemptive
rights.
(h) On the Commencement Date and the Exchange Date,
the Co-Dealer Managers shall have received a signed opinion
of Xxxx & Priest LLP, of counsel for the Company, dated as
of such date, as to the matters described in Sections
7(f)(ii) through (vi), (viii), (ix) and (x) herein and to
the effect that such counsel confirms its opinion under the
caption "Certain United States Federal Income Tax
Consequences" in the Prospectus.
In rendering such opinion, such counsel may rely as to
certain matters of fact on certificates of officers of the
Company and of public officials and may state that such
counsel expresses no opinion as to the laws of any
jurisdiction other than the State of New York and the
federal law of the United States.
(i) The Co-Dealer Managers shall have received the
favorable opinion of Counsel for the Co-Dealer Managers,
dated as of the Commencement Date and the Exchange Date,
covering the incorporation and legal existence of the
Company, the issuance and delivery of the Preferred
Securities, this Agreement, the Registration Statement, the
Prospectus and such other related matters as the Co-Dealer
Managers may require. In giving such opinion such counsel
may rely, as to all matters governed by the laws of the
State of Texas, upon the opinion of Xxxxxxx, Xxxxxxxx &
Xxxxxxxxxx, L.L.P. Such counsel may also state that,
insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of
officers of the Company and certificates of public
officials.
(j) On the Commencement Date, the Co-Dealer Managers
shall have received from the Company's independent public
accountants, in form and substance satisfactory to the
Co-Dealer Managers and dated as of such date, containing
statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial
information contained in or incorporated by reference into
the Prospectus.
(k) At the Exchange Date, the Co-Dealer Managers shall
have received from the Company's independent public
accountants, in form and substance satisfactory to the
Co-Dealer Managers and dated as of such dates, to the effect
that such accountants reaffirm the statements made in the
letter furnished pursuant to Section 7(j).
(l) By the Exchange Date, the Company shall have
entered into appropriate agreements with the Information
Agent and the Exchange Agent for purposes of the Exchange
Offer.
8. Termination. (a) This Agreement shall terminate upon
-----------
the earliest to occur of (i) the last Exchange Date with respect
both series of Depositary Shares, (ii) the date on which the
Co-Dealer Managers give notice to the Company and the Trust that
any of the conditions specified in Section 7 have not been
fulfilled as of any date such conditions are required to be
fulfilled pursuant to Section 7 or (iii) the date on which the
Company terminates or withdraws the Exchange Offer for any reason
(the earliest to occur of clauses (i), (ii) or (iii) being
referred to as the "Termination Date").
(b) Notwithstanding termination of this Agreement pursuant
to subsection (a) of this Section 8, the obligations of the
Company to compensate the Co-Dealer Managers pursuant to Section
3, the representations and warranties contained in Section 5 and
the provisions of Section 6 shall survive any termination of this
Agreement.
9. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been
duly given if delivered, mailed or transmitted by any standard
form of telecommunication. Notices to the Co-Dealer Managers
shall be directed to Xxxxxxx Xxxxx & Co., World Financial Center,
Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention Xxxx
Xxxxxxxxx, with a copy to Xxxxxxx X. Xxxxx, Esq., Winthrop,
Stimson, Xxxxxx & Xxxxxxx, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, and notices to the Company and the Trust shall be
directed to either of them c/o Texas Utilities Electric Company,
0000 Xxxxx Xxxxxx, Xxxxxx, Xxxxx 00000, attention Xxxxxxx X.
Xxxxx. Any notice under Section 6 hereof may be made by telex or
telephone, but if so made, shall be subsequently confirmed
promptly in writing.
10. Tombstone. The Company and the Trust acknowledge that
---------
the Co-Dealer Managers may, with the prior review and approval of
the Company, which approval shall not be unreasonably withheld,
place an announcement in such newspapers and periodicals as the
Co-Dealer Managers may choose, stating that the Co-Dealer
Managers are or were acting as co-dealer managers and financial
advisors to the Company and the Trust in connection with the
Exchange Offer. The costs relating to any such tombstone shall
be borne by the Co-Dealer Managers.
11. Survival of Certain Provisions. The representations,
------------------------------
warranties, indemnities and agreements of the Company and the
Trust will remain operative and in full force and effect
regardless of any investigation made by or on behalf of any
Co-Dealer Manager or any affiliate or controlling person thereof
and, subject to Section 8(b), will survive the consummation of
the Exchange Offer.
12. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the laws of the State of New
York, without giving effect to principles of conflicts of laws.
13. Counterparts. This Agreement may be executed in one or
------------
more counterparts, and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same
Agreement.
14. Successors. This Agreement is made solely for the
----------
benefit of the Co-Dealer Managers, the Company and the Trust and,
to the extent expressed, the parties indemnified pursuant to
Section 6, and no other persons shall acquire or have any right
under or by virtue of this Agreement. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other
than the parties hereto or their respective successors and
assigns, and, to the extent expressly set forth herein, the
parties indemnified pursuant to Section 6 hereof, any rights or
remedies under or by reason of this Agreement. Without limiting
the generality of the foregoing, the parties acknowledge that
nothing in this Agreement, expressed or implied, is intended to
confer on holders of the securities of the Trust or the Company
or creditors of the Company or the respective successors and
assigns of such creditors, any rights or remedies under or by
reason of this Agreement.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof,
whereupon this instrument will become a binding agreement among
the Company, the Trust and the Co-Dealer Managers in accordance
with its terms.
Very truly yours,
TEXAS UTILITIES ELECTRIC COMPANY
By:
---------------------------
TU ELECTRIC CAPITAL II
By:
---------------------------
not in his/her individual
capacity but solely as
Administrative Trustee
Confirmed and accepted as of
the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
XXXXXXX, XXXXX & CO.
XXXXXX BROTHERS INC.
XXXXX XXXXXX INC.
By: Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
By:
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