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 Gas 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, 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,
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1998, 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 and three of its financing subsidiaries (the "Trusts")
have filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 on , 1999 (Registration
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Nos. 333- , 333- -01, 333- -02 and 333- -03) for
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the registration under the Securities Act of 1933, as amended (the
"Securities Act") of $500,000,000 aggregate amount of (i) the Company's
unsecured debt securities ("Debt Securities") and (ii) the preferred trust
securities of the Trusts, and a principal amount of the Company's junior
subordinated debentures and guarantees and other obligations of the Company
in respect of such preferred trust securities. Such registration statement
("Registration Statement No. 333- ") became effective on ,
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1999. The Company has also filed with the Commission under the Securities
Act, a registration statement on Form S-3 on January 7, 1998 (Registration
Nos. 333-43811 and 333-43811- 01) for the registration of $275,000,000
aggregate amount (i) the company's Debt Securities and (ii) certain trust
securities of ENSERCH Capital I, which has been renamed TXU Gas Capital I,
and related securities of the Company, of which all but $100,000,000
aggregate principal amount of the Company's Debt Securities have been
previously issued. Such registration statement was declared effective by
the Commission on January 13, 1998. Such registration statement
("Registration Statement No. 333-43811") was amended by Post-Effective
Amendment No. 1, which was filed on January 21, 1998 and became effective
on January 23, 1998. References herein to the term "Registration Statement"
as of any date shall be deemed to refer to each of Registration Statement
Nos. 333- and Registration Statement No. 333- 43811, each as amended
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or supplemented to such date, including all documents incorporated by
reference therein as of such date pursuant to Item 12 of Form S-3
("Incorporated Documents"). References herein to the term "Prospectus" as
of any given date shall be deemed to refer to the combined prospectus
relating to the securities registered under Registration Statement
333- and the securities registered and remaining unissued under
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Registration Statement 333-43811 that forms a part of Registration
Statement No. 333- , as amended or supplemented as of such date
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(other than by amendments or supplements relating to securities other than
the Securities), including all Incorporated Documents as of such date and
including any prospectus supplement relating to the Securities; provided
that if the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the General Rules and Regulations of the
Securities Act (the "Rule 462(b) Registration Statement"), then after such
filing, all references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement. References herein to the
term "Effective Date" shall be deemed to refer to the time and date
Registration Statement No. 333- or the Rule 462(b) Registration
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Statement, as the case may be, was declared effective. 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 complied in all material respects and at the Closing Date, as
hereinafter defined, the Registration Statement, the Prospectus, the Trust
Agreement, the Indenture and the Guarantee will comply in all material
respects with the applicable provisions of the Securities Act, the Trust
Indenture Act of 1939, as amended ("Trust Indenture Act"), and the
applicable rules and regulations of the Commission thereunder; on the
Effective Date the Registration Statement did not, and at the Closing Date,
as hereinafter defined, the Registration Statement will not, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; on the Effective Date the Prospectus did not, and at the
Closing Date, as hereinafter defined, and on the date it is filed with 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, complied or will comply
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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 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 and Qualification 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 or other agreement or instrument to which the
Company or the Trust is now a party.
4. Purchase and Sale.
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(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the
Trust shall sell to each of the Underwriters, and each Underwriter shall
purchase from the Trust, at the time and place herein specified, severally
and not jointly, the liquidation preference amount 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.
(b) The Company shall pay to the Underwriters a commission
equal to % of the aggregate liquidation preference amount of the
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Preferred Trust Securities.
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 Xxxxxx Xxxx & Priest
LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York Time, on
, or at such other place, time and date as shall be agreed
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upon in writing by the Company and you or established in accordance with the
following paragraph. The hour and date of such delivery and payment are herein
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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 you not later than the
close of business on the business day preceding the Closing Date. The Trust
agrees to make the Preferred Trust Securities available to you for checking
purposes not later than 10:00 A.M., New York Time, on the last business day
preceding the Closing Date at the offices of Xxxxxx Xxxx & Priest, 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, 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 others, who are members of the National Association of Securities Dealers,
Inc. ("NASD") (or, if not members of the NASD, who are not eligible for
membership in the NASD and who agree (i) to make no sales within the United
States, its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply with the NASD's
Conduct Rules) and satisfactory to the Company, to purchase, upon the terms
herein set forth, the liquidation preference amount of the Preferred Trust
Securities that the defaulting Underwriter had agreed to purchase. If any
non-defaulting Underwriter or Underwriters shall determine to exercise such
right, such Underwriter or Underwriters shall give written notice to the Company
of the determination in that regard within 24 hours after receipt of notice of
any such default, and thereupon the Closing Date shall be postponed for such
period, not exceeding three business days, as the Company shall determine. If in
the event of such a default no non-defaulting Underwriter shall give such
notice, then this Agreement may be terminated by the Company, upon like notice
given to the non-defaulting Underwriters, within a further period of 24 hours.
If in such case the Company shall not elect to terminate this Agreement it shall
have the right, irrespective of such default:
(a) to require each non-defaulting Underwriter to purchase and
pay for the respective liquidation preference amount of the Preferred Trust
Securities that it had 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
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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 to purchase or that portion thereof that the
remaining Underwriters shall not be obligated to purchase pursuant to the
foregoing clause (a).
In the event the Company shall exercise its rights under (a) and/or (b) above,
the Company shall give written notice thereof to the non-defaulting Underwriters
within such further period of 24 hours, and thereupon the Closing Date shall be
postponed for such period, not exceeding three business days, as the Company
shall determine.
In the computation of any period of 24 hours referred to in this
Section 5, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday that would otherwise be included in such
period of time.
Any action taken by the Company under this Section 5 shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement. Termination by the Company under this Section
5 shall be without any liability on the part of the Company or any
non-defaulting Underwriter, except as otherwise provided in Sections 6(g) and 9
hereof.
6. Covenants of the Company. The Company agrees that:
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(a) It will promptly deliver to each of you a signed copy of the
Registration Statement as originally filed or, to the extent a signed copy
is not available, a conformed copy, certified by an officer of the Company
to be in the form as originally filed, including all Incorporated Documents
and exhibits and of all amendments thereto.
(b) It will deliver to you, as soon as practicable after the
date hereof, as many copies of the Prospectus as of such date as you may
reasonably request.
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(c) It will cause the Prospectus to be filed with the Commission
pursuant to Rule 424 as soon as practicable and advise you of the issuance
of any stop order under the Securities Act with respect to the Registration
Statement or the institution of any proceedings therefor of which the
Offerors shall have received notice. The Company will use its best efforts
to prevent the issuance of any such stop order and to secure the prompt
removal thereof if issued.
(d) If, during such period of time (not exceeding nine months) after
the Prospectus has been filed with 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 you shall occur that in the Company's reasonable opinion after
consultation with Counsel for the Underwriters should be set forth in a
supplement to, or an amendment of, the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances when it is
delivered to a purchaser, the Company will, at its expense, amend or
supplement the Prospectus by either (i) preparing and furnishing to you at
the Company's expense a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus or (ii) making
an appropriate filing pursuant to Section 13 of the Exchange Act, which
will supplement or amend the Prospectus so that, as supplemented or
amended, it will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading; provided that should such event relate
solely to the activities of any of the Underwriters, then the Underwriters
shall assume the expense of preparing and furnishing any such amendment or
supplement. In case any Underwriter is required to deliver a prospectus
after the expiration of nine months from the date the Prospectus is filed
with the Commission pursuant to Rule 424, the Company, upon such
Underwriter's request, will furnish to such Underwriter, at the expense of
such Underwriter, a reasonable quantity of a supplemental prospectus or
supplements to the Prospectus complying with Section 10(a) of the
Securities Act.
(e) It will make generally available to its security holders and the
security holders of the Trust, as soon as practicable, an 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
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succeeding the month in which occurred the effective date of the
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 you may designate, provided that the 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 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, (iii) the
qualification of the Preferred Trust Securities under blue-sky laws
(including counsel fees not to exceed $7,500), 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 yours or any of the Underwriters, except that, if this
Agreement shall be terminated in accordance with the provisions of
Section 7, 8 or 10 hereof, the Company will reimburse you for the fees and
disbursements of Counsel for the Underwriters, whose fees and disbursements
the Underwriters agree to pay in any other event, and will reimburse the
Underwriters for their reasonable out-of-pocket expenses, in an aggregate
amount not exceeding $5,000, incurred in contemplation of the performance
of this Agreement. The Company shall not in any event be liable to any of
the several Underwriters for damages on account of loss of anticipated
profits.
(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
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of its obligations to be performed hereunder prior to the Closing Date, and to
the following conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424 prior to 5:30 P.M., New York Time, on the second
business day after the date of this Agreement, or such other time and date
as may be approved by you.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for that purpose shall be
pending before, or threatened by, the Commission on the Closing Date; and
you shall have received a certificate, dated the Closing Date and signed by
an officer of the Company, to the effect that no such stop order is in
effect and that no proceedings for such purpose are pending before, or to
the knowledge of the Company threatened by, the Commission.
(c) On the Closing Date, you shall have received from Xxxxxxxx,
Xxxxxx & Finger, P.A., Delaware counsel for the Company and the Trust,
Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, L.L.P., General Counsel for the Company,
Xxxxxx Xxxx & Priest LLP, of counsel for the Company, and Winthrop,
Stimson, Xxxxxx & Xxxxxxx, Counsel for the Underwriters, opinions in
substantially the form and substance prescribed in Schedules III, IV, V and
VI hereto (i) with such changes therein as may be agreed upon by the
Company and you, with the approval of Counsel for the Underwriters, and
(ii) if the Prospectus relating to the 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, you shall have received from
Deloitte & Touche LLP a letter to the effect that (i) they are independent
certified public accountants with respect to the Company, within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder, (ii) in their opinion, the financial statements
audited by them and included or incorporated by reference in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the applicable published rules and
regulations thereunder, (iii) on the basis of a reading of the unaudited
amounts of operating revenues and net income included or incorporated by
reference in the Prospectus and the related financial statements from which
these amounts were derived, the latest available unaudited financial
statements of the Company and the minute books of the Company and inquiries
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of officers of the Company and of certain direct and indirect subsidiaries
of the Company who have responsibility for financial and accounting matters
(it being understood that the foregoing procedures do not constitute an
audit made in accordance with generally accepted auditing standards and
would not necessarily reveal matters of significance with respect to the
comments made in such letter, and accordingly that Deloitte & Touche LLP
makes no representation as to the sufficiency of such procedures for the
several Underwriters' purposes), nothing has come to their attention which
caused them to believe that (A) the unaudited financial statements of the
Company incorporated by reference in the Prospectus were not determined in
accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the corresponding amounts in the
latest available audited financial statements of the Company, (B) the
unaudited amounts of operating revenues and net income of the Company
included or incorporated by reference in the Prospectus were not determined
on a basis substantially consistent with that of the corresponding amounts
in the audited statements of income of the Company, incorporated by
reference in the Prospectus, (C) for the twelve months ended
, if available, there were any decreases in operating
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revenues or net income as compared with the comparable period of the
preceding year, and (D) at a specified date not more than seven days prior
to the date of such letter, there was any change in the capital stock of
the Company, short-term bank loans, commercial paper, notes payable to TXU
Corp or long-term debt of the Company or decrease in its net assets, in
each case as compared with amounts shown in the most recent balance 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 you (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company and its consolidated subsidiaries subject
to the internal controls of the accounting system of such companies or are
derived indirectly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter, and have found such
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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, and,
since such dates, there shall not have been any material transaction
entered into by the Company and its 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 you shall have received a certificate to such effect dated the
Closing Date and signed by an officer of the Company.
(f) All legal proceedings to be taken in connection with the issuance
and sale of the 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) Since the date of this agreement, neither Xxxxx'x Investor
Services nor Standard and Poor's Corporation shall have downgraded or
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any securities of the Company which
are of the same class as the Preferred Trust Securities or the financial
condition of the Company.
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 you. Any such
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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 and each person who controls any Underwriter
within the meaning of Section 15 of the Securities Act from and against any
and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or any
other statute or common law and shall reimburse each such Underwriter and
controlling person for any legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading; provided, however, that the indemnity
agreement contained in this Section 9 shall not apply to any such losses,
claims, damages, liabilities, expenses or actions arising out of, or based
upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in
reliance upon information furnished in writing to the Offerors by or on
behalf of any Underwriter, 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 and Qualification 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 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 and such amendment or supplement corrected the alleged
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omission or alleged untrue statement in the Prospectus) (exclusive of the
Incorporated Documents) shall not have been given or sent to such person by
or on behalf of such Underwriter with or prior to the written confirmation
of the sale involved. The indemnity agreement of the Offerors contained in
this Section 9 and the representations and warranties of the Offerors
contained in Section 3 hereof shall remain operative and in full force and
effect regardless of any termination of this Agreement or of any
investigation made by or on behalf of any Underwriter or any such
controlling person, and shall survive the delivery of the 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
or several, to which they or any of them may become subject under the
Securities Act or any other statute or common law and shall reimburse each
of them for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them in
connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (or
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 not misleading, if such statement or
omission was made in reliance upon and in conformity with information
furnished in writing to the Offerors by or on behalf of such Underwriter,
through the Representatives or Counsel for the Underwriters, 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 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
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any person controlling it as aforesaid, in respect of which indemnity may
be sought on account of any indemnity agreement contained herein, promptly
give written notice of the commencement thereof to the party or parties
against whom indemnity shall be sought hereunder, but the omission so to
notify such indemnifying party or parties of any such action shall not
relieve such indemnifying party or parties from any liability which it or
they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of such action, in which event
such defense shall be conducted by counsel chosen by such indemnifying
party or parties and satisfactory to the indemnified party or parties who
shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume
the defense of such action, such indemnifying party will reimburse such
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by them; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and
counsel for the indemnifying party shall have reasonably concluded that
there may be a conflict of interest involved in the representation by such
counsel of both the indemnifying party and the indemnified party, the
indemnified party or parties shall have the right to select separate
counsel, satisfactory to the indemnifying party, to participate in the
defense of such action on behalf of such indemnified party or parties (it
being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel representing the
indemnified parties who are parties to such action). Each of the Company
and the Underwriters agrees that without the other party's prior written
consent, which consent shall not be unreasonably withheld, it will not
settle, compromise or consent to the entry of any judgment in any claim in
respect of which indemnification may be sought under the indemnification
provisions of this Agreement, unless such settlement, compromise or consent
(i) includes an unconditional release of such other party from all
liability arising out of such claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on
behalf of such other party.
(d) If the indemnification provided for in subparagraph (a) or (b)
above shall be unenforceable under applicable law by an indemnified party,
-14-
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 (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above.
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 proportion to the principal
amount of Preferred Trust Securities set forth opposite its name in
Schedule II hereto.
10. Termination. This Agreement may be terminated, at any time prior
-----------
to the Closing Date, by the Representatives by written notice to the Company if
(a) after the date hereof and at or prior to the Closing Date 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
-15-
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 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 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
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 you at the address set
forth above, or, if to the Company, shall be mailed or delivered to it at 0000
Xxxxx Xxxxxx, Xxxxxx, Xxxxx 00000, Attention: Treasurer.
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
-16-
for that purpose, whereupon this letter and your acceptance shall constitute a
binding agreement between the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
TXU GAS COMPANY
By
------------------------------------
[NAME OF TRUST]
By
------------------------------------
(Authorized Representative)
Accepted and delivered as of
the date first above written
[REPRESENTATIVES OF UNDERWRITERS]
By:
By:
-----------------------------------
-17-
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
SCHEDULE II
-----------
[Name of Trust]
Preferred Trust Securities
Liquidation
Preference
Amount of
Preferred Trust
Name Securities
---- ---------------
Total ===============
$
II
SCHEDULE III
------------
[LETTERHEAD OF XXXXXXXX, XXXXXX & 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 Gas 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 ,
------------
1999 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on , 1999;
(b) The Trust Agreement of the Trust, dated as of ,
------------------
1999, by and among the Company and the trustees of the Trust named therein;
(c) The Prospectus, dated _, 1999, 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,
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
III-2
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.
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.
III-3
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
set forth in paragraph 7 below, fully paid and nonassessable 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
III-4
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
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
Winthrop, Stimson, Xxxxxx & Xxxxxxx', Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, L.L.P.'s
and Xxxxxx Xxxx & 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
III-5
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 XXXXXXX, XXXXXXXX & XXXXXXXXXX, L.L.P.]
[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 Gas Company, a Texas
corporation (the "Company"), in connection with the transactions contemplated by
the Underwriting Agreement dated , 1999 among the Company, [Name of
-------------
Trust] (the "Trust") and you (the "Underwriting Agreement"), including, among
others, (i) the issuance by the Trust, a statutory business trust organized
under the Delaware Business Trust Act (the "Delaware Act"), of 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").
IV-1
Terms not otherwise defined herein are used with the meanings ascribed
to them in the Underwriting Agreement.
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, the Trust Agreement, the Indenture, the Debentures and
the Guarantee. We have also examined such other documents and satisfied
ourselves as to such other matters as we have deemed necessary as a basis for
the conclusions of law contained in the opinions expressed below. We have relied
as to various questions of fact upon the representations and warranties of the
Company contained in the Underwriting Agreement and, where we deemed
appropriate, on certificates of public officials. We have relied upon a
certificate of the Indenture Trustee as to the authentication of the Debentures.
In our examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as photostatic or certified
copies.
Upon the basis of our familiarity with these transactions and with the
affairs and properties of the Company generally, we are of the opinion that:
1. The Company is a 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 are entitled to the
benefits of the Indenture, and the Debentures and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
IV-2
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
5. The Guarantee has been duly authorized, executed and delivered by
the Company, and is enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles of equity.
6. The statements made in the Prospectus under the captions
"Description of 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 within
the meaning of 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, 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 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
under the Securities Act (except for financial statements and schedules and
other financial and statistical data contained or incorporated by reference
therein and except for that part of the Registration Statement that constitutes
the Forms T-1, 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,
IV-3
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 best 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) is legally required for the authorization
of the issue and sale by the Company of the Debentures and the issuance by the
Company of the Guarantee.
In the course of the preparation of the information relating to the
Company contained in the Prospectus (including the documents incorporated
therein by reference) we had discussions with certain of its officers and
representatives and certain officers and representatives of certain of its
subsidiaries, 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 documents incorporated by reference in the
Registration Statement and the Prospectus, 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 documents incorporated therein by reference) 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 Forms 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
IV-4
Commission pursuant to Rule 424, included, or on the date hereof includes an
untrue statement of a material fact or on such dates omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
We are members of the State Bar of Texas and do not hold ourselves out
as experts in the laws of the State of New York. As to all matters of New York
law, we have, with your consent, relied upon the opinion of even date herewith
of Xxxxxx Xxxx & Priest LLP, New York, New York, of Counsel to the Company; as
to all matters of Delaware law, we have, with your consent, relied upon the
opinion of even date herewith of Xxxxxxxx, Xxxxxx & Finger, P.A., Wilmington,
Delaware, special counsel for the Company and the Trust.
Very truly yours,
XXXXXXX, XXXXXXXX &
XXXXXXXXXX, L.L.P.
By:
------------------------------------
A Partner
IV-5
Schedule V
[LETTERHEAD OF XXXXXX XXXX & 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 Gas Company, a Texas corporation (the
"Company"), in connection with the transactions contemplated by the Underwriting
Agreement dated , 1999 among the Company, [Name of Trust] (the
-------------
"Trust") and you (the "Underwriting Agreement"), including, among others,
(i) the issuance by the Trust, a statutory business trust organized under the
Delaware Business Trust Act (the "Delaware Act") of 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.
V-1
In so acting we have participated in or reviewed the corporate
proceedings in connection with the authorization, execution and delivery of the
Underwriting Agreement, the Trust Agreement, the Indenture, the Debentures and
the Guarantee. We have also examined such other documents and satisfied
ourselves as to such other matters as we have deemed necessary as a basis for
the conclusions of law contained in the opinions expressed below. We have relied
as to various questions of fact upon the representations and warranties of the
Company contained in the Underwriting Agreement and, where we deemed
appropriate, on certificates of public officials. We have relied upon a
certificate of the Indenture Trustee as to the authentication of the Debentures.
In our examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as photostatic or certified
copies.
Upon the basis of our familiarity with these transactions and with the
affairs and properties of the Company generally, we are of the opinion that:
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
2. The Indenture, the Trust Agreement and the Guarantee have been
duly qualified under the Trust Indenture Act.
3. The Debentures and the Indenture have been duly authorized,
executed and delivered by the Company, the Debentures are entitled to the
benefits of the Indenture, and the Debentures and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
4. The Guarantee has been duly authorized, executed and delivered by
the Company, and is enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles of equity.
5. The statements made in the Prospectus under the captions
"Description of TXU Capital's Preferred Trust Securities and Common Trust
V-2
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 within
the meaning of 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 Forms 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 best 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) is legally required for the authorization
of the issue and sale by the Company of the Debentures and the issuance by the
Company of the Guarantee.
We herewith confirm as our opinion the statements under the caption
"Certain United States Federal Income Tax Consequences Relating 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 documents incorporated
therein by reference) we had discussions with certain of its officers
V-3
and representatives, and certain officers and representatives of certain of its
subsidiaries, 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 documents incorporated by reference in the
Registration Statement and the Prospectus, 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 documents incorporated therein by reference) 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 Forms 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 even date herewith of
Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, L.L.P., Dallas, Texas, General Counsel for the
Company; as to all matters of Delaware law, we have, with your consent, relied
upon the opinion of even date herewith of Xxxxxxxx, Xxxxxx & 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.
Very truly yours,
XXXXXX XXXX & PRIEST LLP
V-4
SCHEDULE VI
[Letterhead of Winthrop, Stimson, Xxxxxx & Xxxxxxx]
[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 , 1999 between TXU Gas Company, a Texas corporation (the
-----------
"Company"), [Name of Trust] (the "Trust") and you (the "Underwriting Agreement")
in which (i) the Trust, a statutory business trust organized under the Delaware
Business Trust Act, proposes to issue $ ,000,000 aggregate liquidation
-----
preference amount of its 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
VI-1
upon an opinion of even date herewith addressed to you by Xxxxxxx, Xxxxxxxx &
Xxxxxxxxxx, L.L.P., Dallas, Texas, General Counsel for the Company, as to the
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 Xxxxxxxx, Xxxxxx
& 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. As to various questions
of fact material to this opinion, we have relied upon representations of the
Company and statements in the Registration Statement hereinafter mentioned. In
such examination we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us and the genuineness and conformity
to original documents of documents submitted to us as certified or photostatic
copies.
Based upon the foregoing, we are of the opinion that:
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
2. The Indenture has been duly qualified under the Trust Indenture
Act.
3. The Debentures and the Indenture have been duly authorized,
executed and delivered by the Company, the Debentures are entitled to the
benefits of the Indenture, and the Debentures and the Indenture are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, fraudulent conveyance, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
4. The Guarantee has been duly authorized, executed and delivered by
the Company, and is enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles of equity.
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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, or after giving effect to
the issuance and sale of the Preferred Trust Securities, will be, and neither
the Company nor the Trust is directly or indirectly controlled by, or acting on
behalf of any person which is, an investment company within the meaning of the
Investment Company Act of 1940.
7. No other approval, authorization, consent or order of any public
board or body (other than in connection or in compliance with the blue-sky laws
of any jurisdiction) is legally required for the authorization of the issue and
sale by the Company of the Debentures and the issuance by the Company of the
Guarantee as contemplated in the Underwriting Agreement.
8. 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 financial statements and schedules and other
financial and statistical data contained or incorporated by reference therein
and except for that part of the Registration Statement that constitutes the
Forms T-1, 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, and representatives of certain of its subsidiaries, with
counsel for the Company, with Deloitte & Touche LLP, the Company's independent
VI-3
public accountants who audited certain of the financial statements contained in
documents incorporated by reference in the Registration Statement and the
Prospectus, and with certain of your representatives. Our examination of the
Registration Statement and the Prospectus and our discussions did not disclose
to us any information which gives us reason to believe that at the Effective
Date the Registration Statement contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus, at the
time it was filed with the Commission pursuant to Rule 424, or at the date
hereof, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. We do not express any opinion or belief as to the financial
statements and schedules or other financial or statistical data contained or
incorporated by reference in the Registration Statement or Prospectus or as to
that part of the Registration Statement that constitutes the Forms T-1.
This opinion is given to you solely for the use of the several
Underwriters in connection with the Underwriting Agreement and the transactions
contemplated thereunder and may not be relied upon by any other person or for
any other purpose.
Very truly yours,
VI-4
