-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A7uPV3oqCIj3v4/y0dA7v9GEzE0mXFqb/7vuUcoDs5zpLtBJFE0q5Ru/iHNUnnqm RwttxbMnsEiaaMdyV2UCHw== 0000950120-98-000014.txt : 19980116 0000950120-98-000014.hdr.sgml : 19980116 ACCESSION NUMBER: 0000950120-98-000014 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19980115 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENSERCH CORP CENTRAL INDEX KEY: 0000033015 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 750399066 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: SEC FILE NUMBER: 033-52525 FILM NUMBER: 98507912 BUSINESS ADDRESS: STREET 1: ENERGY PLAZA STREET 2: 1601 BRYAN STREET CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 214-812-4600 MAIL ADDRESS: STREET 1: 300 S ST PAUL ST CITY: DALLAS STATE: TX ZIP: 75201 FORMER COMPANY: FORMER CONFORMED NAME: LONE STAR GAS CO DATE OF NAME CHANGE: 19751015 POS AM 1 POST-EFFECT. AMD. NO. 1 TO FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1998 REGISTRATION NO. 33-52525 ================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------------- ENSERCH CORPORATION (Exact name of registrant as specified in its charter) TEXAS 75-0399066 (State or other (I.R.S. Employer jurisdiction of Identification No.) incorporation or organization) ENERGY PLAZA, 1601 BRYAN STREET DALLAS, TEXAS 75201 (214) 812-4600 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) ROBERT A. WOOLDRIDGE, ESQ. PETER B. TINKHAM ROBERT J. REGER, JR., WORSHAM, FORSYTHE EXECUTIVE VICE ESQ. & WOOLDRIDGE, L.L.P. PRESIDENT REID & PRIEST LLP ENERGY PLAZA, 1601 BRYAN TEXAS UTILITIES 40 WEST 57TH STREET STREET SERVICES INC. NEW YORK, NEW YORK DALLAS, TEXAS 75201 ENERGY PLAZA 10019 (214) 979-3000 1601 BRYAN STREET (212) 603-2000 DALLAS, TEXAS 75201 (214) 812-4600 (Names, addresses, including zip codes, and telephone numbers, including area codes, of agents for service) ----------------------- IT IS RESPECTFULLY REQUESTED THAT THE COMMISSION SEND COPIES OF ALL NOTICES, ORDERS AND COMMUNICATIONS TO: STEPHEN K. WAITE, ESQ. WINTHROP, STIMSON, PUTNAM & ROBERTS ONE BATTERY PARK PLAZA NEW YORK, NEW YORK 10004 (212) 858-1000 ================================================================= REMOVAL OF SECURITIES FROM REGISTRATION AND CHANGES TO THE TERMS OF REGISTERED DEBT SECURITIES Since the effective date of Registration Statement No. 33- 52525 (Registration Statement) two of the registrants thereunder, Enserch Capital L.L.C. (Enserch LLC) and Enserch Preferred Capital, Inc. have ceased to exist. The Company, the remaining registrant under the Registration Statement, hereby amends the Registration Statement to withdraw from registration all the Enserch Capital L.C.C. Preferred Securities and ENSERCH Corporation and Enserch Preferred Capital, Inc. Backup Undertakings with respect to Enserch Capital L.L.C. Preferred Securities registered under the Registration Statement. The Company further amends the Registration Statement to withdraw from registration all the ENSERCH Corporation Preferred Stock, of no par value, the ENSERCH Corporation Depositary Shares, and the ENSERCH Corporation Common Stock, par value $4.45 per share. The securities remaining registered under the Registration Statement are the ENSERCH Corporation Debt Securities having the terms described in the Prospectus included in this Post-Effective Amendment No. 1 to the Registration Statement. Information contained herein is subject to completion or amendment. An amendment to the registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the amendment to the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. SUBJECT TO COMPLETION, DATED JANUARY 15, 1998 PROSPECTUS $225,000,000 ENSERCH CORPORATION DEBT SECURITIES ENSERCH Corporation, a Texas corporation (Company), may offer, from time to time, in amounts, at prices and on terms to be determined at the time of offering, unsecured debt securities of the Company consisting of debentures, notes or other unsecured evidences of indebtedness (Debt Securities). Specific terms of each issue of Debt Securities in respect of which this Prospectus is being delivered (Offered Debt Securities) will be set forth in one or more Prospectus Supplements with respect to such Offered Debt Securities. The applicable Prospectus Supplement will describe, without limitation and where applicable or additional to the terms in the Prospectus, the following: the title, aggregate principal amount, denomination, maturity, premium, if any, rate of interest (which may be fixed or variable) or method of calculation thereof, time of payment of interest, any terms for redemption, any sinking fund provisions, the initial public offering price, the principal amounts, if any, to be purchased by underwriters and any other special terms of the Offered Debt Securities. The Company may sell the Debt Securities through underwriters, dealers or agents designated from time to time, or directly to one or more of a limited number of purchasers. If any agents of the Company or any underwriters or dealers are involved in the sales of the Offered Debt Securities, the names of such agents or such underwriters or dealers and any applicable commissions or discounts will be set forth in the related Prospectus Supplement. See PLAN OF DISTRIBUTION. This Prospectus may not be used to consummate sales of Debt Securities unless accompanied by a Prospectus Supplement. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is January , 1998. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company, File No. 1- 3183, with the Securities and Exchange Commission (Commission) pursuant to the Securities Exchange Act of 1934, as amended (1934 Act), are incorporated herein by reference: 1. Annual Report on Form 10-K for the year ended December 31, 1996 (1996 10-K). 2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997. 3. Current Reports on Form 8-K, dated January 14, 1997, March 12, 1997, June 5, 1997, July 3, 1997, August 4, 1997, August 6, 1997 and January 6, 1998. All documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and prior to the termination of the offering hereunder shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents; provided, however, that the documents enumerated above or subsequently filed by the Company pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act prior to the filing with the Commission of the Company's most recent Annual Report on Form 10-K shall not be incorporated by reference in this Prospectus or be a part hereof from and after the filing of such Annual Report on Form 10-K. The documents which are incorporated by reference in this Prospectus are sometimes hereinafter referred to as the "Incorporated Documents." Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which is deemed to be incorporated by reference herein or in the Prospectus Supplement modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE INCORPORATED DOCUMENTS WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO: SECRETARY, ENSERCH CORPORATION, 1601 BRYAN STREET, DALLAS, TEXAS 75201, TELEPHONE NUMBER (214) 812-4600. AVAILABLE INFORMATION The Company is subject to the informational requirements of the 1934 Act and in accordance therewith files reports, proxy and information statements and other information with the Commission. Such reports, proxy and information statements and other information filed by the Company can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: Chicago Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and New York Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can also be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the Commission maintains a World Wide Web site (http://www.sec.gov) that contains reports, proxy and information statements, and other information filed by the Company. Certain Depositary Shares representing fractional interests in shares of cumulative preferred stock of the Company 2 are listed on the New York Stock Exchange, where reports and other information concerning the Company may be inspected. Securityholders of the Company may obtain, upon request, copies of an Annual Report on Form 10-K containing financial statements as of the end of the most recent fiscal year audited and reported upon (with an opinion expressed) by independent auditors. THE COMPANY The Company was incorporated under the laws of the State of Texas in 1942 and has perpetual existence under the provisions of the Texas Business Corporation Act. The Company, a wholly owned subsidiary of Texas Utilities Company (Texas Utilities), is an integrated company focused on natural gas. Its major business operations are natural gas pipeline, processing, marketing and distribution. Through these business operations, the Company is engaged in owning and operating interconnected natural gas transmission lines, underground storage reservoirs, compressor stations and related properties in Texas; gathering and processing natural gas to remove impurities and extract liquid hydrocarbons for sale, and the wholesale and retail marketing of natural gas in several areas of the United States, and owning and operating approximately 550 local gas utility distribution systems in Texas. The principal executive offices of the Company are located at 1601 Bryan Street, Dallas, Texas 75201; the telephone number is (214) 812-4600. On August 5, 1997 (Merger Date), Texas Utilities became the holding company for both the Company and Texas Energy Industries, Inc. (TEI). Immediately prior to the transaction (Merger), the Company's ownership interests in Enserch Exploration, Inc. and Lone Star Energy Plant Operations, Inc. (together, the Unacquired Business) were distributed to the holders of the Company's common stock. Pursuant to the Merger, Lone Star Gas Company and Lone Star Pipeline Company, the local distribution and pipeline divisions of the Company, and other businesses, excluding the Unacquired Businesses, were acquired by Texas Utilities. TEI is a holding company formerly known as Texas Utilities Company. The principal subsidiary of TEI is Texas Utilities Electric Company (TU Electric), which is an electric utility engaged in the generation, purchase, transmission, distribution and sale of electric energy wholly within the State of Texas. The other electric utility subsidiaries of TEI are Southwestern Electric Service Company, which is engaged in the purchase, transmission, distribution and sale of electric energy in ten counties in the eastern and central parts of Texas with a population estimated at 126,900, and Texas Utilities Australia Pty. Ltd., owner of Eastern Energy Limited, which is engaged in the purchase, distribution, marketing and sale of electric energy to approximately 481,000 customers in the State of Victoria, Australia. TEI also has three other subsidiaries which perform specialized functions within the Texas Utilities system: Texas Utilities Fuel Company owns a natural gas pipeline system, acquires, stores and delivers fuel gas and provides other fuel services at cost for the generation of electric energy by TU Electric; Texas Utilities Mining Company owns, leases and operates fuel production facilities for the surface mining and recovery of lignite at cost for the generation of electric energy by TU Electric; and Texas Utilities Services Inc. provides financial, accounting, information technology, environmental services, customer services, personnel, procurement and other administrative services at cost. In addition, in November 1997, Texas Utilities acquired Lufkin-Conroe Communications Co. (LCC). LCC offers long-distance, cellular, internet and other services and provides local telephone services in Southeast Texas. 3 USE OF PROCEEDS The Company is offering hereby an aggregate of $225,000,000 of Debt Securities. The net proceeds to be received by the Company from the sale of the Debt Securities, together with funds from operations, are expected to be used for the redemption or repurchase of certain of its outstanding debt and preferred stock, and may also be used to meet expenditures for its construction program and for other corporate purposes, including the repayment of short-term borrowings incurred for similar purposes and outstanding at the time of any such sale. Proceeds may be temporarily invested in short-term instruments pending their application to the foregoing purposes. Reference is made to the Prospectus Supplement applicable to each issuance of Offered Debt Securities. HISTORICAL AND PRO FORMA RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS On the Merger Date, the Company became a wholly-owned subsidiary of Texas Utilities. Immediately prior to the Merger Date, the Company distributed to its common shareholders its interests in the Unacquired Businesses. Texas Utilities accounted for its acquisition of the Company as a purchase. As a result, the Company has made certain purchase accounting adjustments which are reflected in ratios for periods subsequent to the Merger Date. Historical ratios for periods ending prior to the Merger Date were prepared using the Company's historical basis of accounting. Amounts for the period from January 1, 1997 through the Merger Date have been restated to reflect the Unacquired Businesses as discontinued operations. Adjusted ratios are based on unaudited "pro forma" financial information, which is included in the Current Report on Form 8-K of the Company dated January 6, 1998 which is incorporated herein by reference. The "pro forma" financial information gives effect to (i) the distribution by the Company of its interests in the Unacquired Businesses and (ii) the purchase accounting adjustments as a result of the acquisition of the Company by Texas Utilities, all on a pro forma basis as if the events had occurred at the beginning of each period presented. The ratio of earnings to fixed charges for each of the years ended December 31, 1994, 1995 and 1996 was 1.09, 1.06 and 1.44. For each of the years ended December 31, 1992 and 1993, the period from January 1, 1997 through the Merger Date and the period from the Merger Date through September 30, 1997, fixed charges exceeded earnings by $0.2 million, $8.3 million, $19.0 million and $19.8 million, respectively. The ratio of earnings to fixed charges, as adjusted, for the year ended December 31, 1996 was 1.24. For the nine months ended September 30, 1997, as adjusted, fixed charges exceeded earnings by $17.3 million. The ratio of earnings to combined fixed charges and preferred dividends for the year ended December 31, 1996 was 1.24. For each of the years ended December 31, 1992 through 1995, the period from January 1, 1997 through the Merger Date and the period from the Merger Date through September 30, 1997, combined fixed charges and preferred dividends exceeded earnings by $13.2 million, $21.0 million, $3.7 million, $6.3 million, $27.7 million and $22.5 million, respectively. The ratio of earnings to fixed charges, as adjusted, for the year ended December 31, 1996, was 1.01. For the nine months ended September 30, 1997, as adjusted, combined fixed charges and preferred dividends exceeded earnings by 40.2 million. DESCRIPTION OF DEBT SECURITIES The Debt Securities will be issued in one or more series under an indenture or indentures (each an Indenture) between the Company and The Bank of New York or other financial institutions to be named, as Trustee (each an Indenture Trustee), a form of which is filed as an exhibit to the Registration Statement, as amended, of which this Prospectus forms a part. The following description of the terms of the Debt Securities does not purport to be complete and is qualified in its entirety by reference to (i) the respective Indenture and (ii) one or more officer's certificates establishing the Debt Securities to which a form of Debt Security will be attached. Whenever particular provisions 4 or defined terms in an Indenture are referred to under this DESCRIPTION OF DEBT SECURITIES, such provisions or defined terms are incorporated by reference herein. General. Each Indenture will provide for the issuance of Debt Securities in an unlimited amount from time to time. All Debt Securities will be unsecured obligations of the Company. All Debt Securities issued under an Indenture will rank equally and ratably with all other Debt Securities issued under such Indenture. An Indenture will not limit other unsecured debt. The Company's financial statements included in the Incorporated Documents show the amount of such other debt at the date of such statements. See the Prospectus Supplement applicable to each series of Offered Debt Securities. The applicable Prospectus Supplement or Prospectus Supplements will describe the following terms of the Debt Securities: (1) the title of the Debt Securities; (2) any limit upon the aggregate principal amount of the Debt Securities; (3) the date or dates on which the principal of the Debt Securities is payable or the method of determination thereof; (4) the rate or rates, if any, or the method by which such rate will be determined, at which the Debt Securities will bear interest, if any, the date or dates from which any such interest will accrue, the Interest Payment Dates on which any such interest will be payable and the Regular Record Date for any interest payable on any Interest Payment Date and the Person or Persons to whom interest on such Debt Securities will be payable on any Interest Payment Date, if other than the Persons in whose names such Debt Securities are registered at the close of business on the Regular Record Date for such interest; (5) the place or places where, subject to the terms of the respective Indenture as described below under "Payment and Paying Agents," the principal of and premium, if any, and interest on the Debt Securities will be payable and where, subject to the terms of such Indenture as described below under "Registration and Transfer," the Debt Securities may be presented for registration of transfer or exchange and the place or places where notices and demands to or upon the Company in respect of the Debt Securities and such Indenture may be served; the Security Registrar for such Debt Securities; and, if such is the case, that the principal of such Debt Securities will be payable without presentment or surrender thereof; (6) the period or periods within, or date or dates on, which, the price or prices at which and the terms and conditions upon which Debt Securities may be redeemed, in whole or in part, at the option of the Company; (7) the obligation or obligations, if any, of the Company to redeem or purchase any of the Debt Securities pursuant to any sinking fund or other mandatory redemption provisions or at the option of the Holder thereof, and the period or periods within which, or the date or dates on which, the price or prices at which and the terms and conditions upon which the Debt Securities will be redeemed or purchased, in whole or in part, pursuant to such obligation, and applicable exceptions to the requirements of a notice of redemption in the case of mandatory redemption or redemption at the option of the Holder; (8) the denominations in which any Debt Securities will be issuable, if other than denominations of $1,000 and any integral multiple thereof; (9) the currency or currencies, including composite currencies in which the principal of or any premium or interest on the Debt Securities will be payable (if other than in Dollars); (10) if the principal of or any premium or interest on the Debt Securities is to be payable, at the election of the Company or the Holder thereof, in a coin or currency other than that in which the Debt Securities are stated to be payable, the period or periods within which and the terms and conditions upon which, such election is to be made; (11) if the principal of or premium or interest on the Debt Securities is to be payable, or is to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such securities or other property, or the method or other means by which such amount will be determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made; (12) if the amount payable in respect of principal of or any premium or interest on the Debt Securities may be determined with reference to an index or other fact or event ascertainable outside of the respective Indenture, the manner in which such amounts will be determined; (13) if other than the principal amount thereof, the portion of the principal amount of the Debt Securities which will be payable upon declaration of acceleration of the Maturity thereof; (14) any Events of Default, in addition to those specified in the respective Indenture, with respect to the Debt Securities and any covenants of the Company for the benefit of the Holders of the Debt Securities, in addition to those specified in such Indenture; (15) the terms, if any, pursuant to which the Debt Securities may be converted into or exchanged for shares of capital stock or other securities of the Company or any other Person; (16) the obligations or instruments, if any, which will 5 be considered to be Eligible Obligations in respect of such Debt Securities denominated in a currency other than Dollars or in a composite currency, and any additional or alternative provisions for the reinstatement of the Company's indebtedness in respect of such Debt Securities after the satisfaction and discharge thereof; (17) if the Debt Securities are to be issued in global form, (i) any limitations on the rights of the Holder or Holders of such Debt Securities to transfer or exchange the same or to obtain the registration of transfer thereof, (ii) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of temporary form and (iii) any and all other matters incidental to such Debt Securities; (18) if the Debt Securities are to be issuable as bearer securities any and all matters incidental thereto; (19) to the extent not addressed in item (17) above, any limitations on the rights of the Holders of the Debt Securities to transfer or exchange the Debt Securities or to obtain the registration of transfer thereof, and if a service charge will be made for the registration of transfer or exchange of the Debt Securities, the amount or terms thereof; (20) any exceptions to the provisions governing payments due on legal holidays or any variations in the definition of Business Day with respect to such Debt Securities; and (21) any other terms of the Debt Securities, not inconsistent with the provisions of the respective Indenture (Indenture, Section 301). Debt Securities may be sold at a discount below their principal amount. Certain special United States federal income tax considerations, if any, applicable to Debt Securities sold at an original issue discount may be described in the applicable Prospectus Supplement. In addition, certain special United States federal income tax or other considerations, if any, applicable to any Debt Securities which are denominated in a currency or currency unit other than Dollars may be described in the applicable Prospectus Supplement. Except as may otherwise be described in the applicable Prospectus Supplement, the covenants contained in an Indenture will not afford Holders of Debt Securities protection in the event of a highly-leveraged transaction involving the Company. Payment and Paying Agents. Except as may be provided in the applicable Prospectus Supplement, interest, if any, on each Debt Security payable on each Interest Payment Date will be paid to the Person in whose name such Debt Security is registered as of the close of business on the Regular Record Date relating to such Interest Payment Date; provided, however, that interest payable at maturity (whether at stated maturity, upon redemption or otherwise, herein a Maturity) will be paid to the Person to whom principal is paid. However, if there has been a default in the payment of interest on any Debt Security, such defaulted interest may be payable to the Holder of such Debt Security as of the close of business on a date selected by the respective Indenture Trustee which is not more than 15 days and not less than 10 days prior to the date proposed by the Company for payment on such defaulted interest or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Debt Security may be listed, if such Indenture Trustee deems such manner of payment practicable (Indenture, Section 307). Unless otherwise specified in the applicable Prospectus Supplement, the principal of and premium, if any, and interest on, the Debt Securities at Maturity will be payable upon presentation of the Debt Securities at the corporate trust office of The Bank of New York, in The City of New York, as Paying Agent for the Company. The Company may change the Place of Payment on the Debt Securities, may appoint one or more additional Paying Agents (including the Company) and may remove any Paying Agent, all at its discretion (Indenture, Section 602). Registration and Transfer. Unless otherwise specified in the applicable Prospectus Supplement, the transfer of Debt Securities may be registered, and Debt Securities may be exchanged for other Debt Securities of the same series or tranche, of authorized denominations and of like tenor and aggregate principal amount, at the corporate trust office of The Bank of New York in The City of New York, as Security Registrar for the Debt Securities. The Company may change the place for registration of transfer and exchange of the Debt Securities and may designate one or more additional places for such registration and exchange, all at its discretion. Except as otherwise provided in the applicable Prospectus Supplement, no service charge will be made for any transfer or exchange of the Debt Securities, but 6 the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of the Debt Securities. The Company will not be required to execute or to provide for the registration of transfer of, or the exchange of, (a) any Debt Security during a period of 15 days prior to giving any notice of redemption or (b) any Debt Security selected for redemption in whole or in part, except the unredeemed portion of any Debt Security being redeemed in part (Indenture, Section 305). Defeasance. The principal amount of any series of Debt Securities issued under an Indenture will be deemed to have been paid for purposes of such Indenture and the entire indebtedness of the Company in respect thereof will be deemed to have been satisfied and discharged if there shall have been irrevocably deposited with the respective Indenture Trustee or any paying agent, in trust: (a) money in an amount which will be sufficient, or (b) in the case of a deposit made prior to the maturity of the Debt Securities, Eligible Obligations (as defined below), the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with the money, if any, deposited with or held by such Indenture Trustee, will be sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay when due the principal of and premium, if any, and interest, if any, due and to become due on the Debt Securities of such series that are Outstanding. For this purpose, Eligible Obligations include direct obligations of, or obligations unconditionally guaranteed by, the United States of America entitled to the benefit of the full faith and credit thereof and certificates, depositary receipts or other instruments which evidence a direct ownership interest in such obligations or in any specific interest or principal payments due in respect thereof and which do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof (Indenture, Section 701). Consolidation, Merger, and Sale of Assets. Under the terms of an Indenture, the Company may not consolidate with or merge into any other entity or convey, transfer or lease its properties and assets substantially as an entirety to any entity, unless (i) the entity formed by such consolidation or into which the Company is merged or the entity which acquires by conveyance or transfer, or which leases, the property and assets of the Company substantially as an entirety shall be an entity organized and validly existing under the laws of any domestic jurisdiction and such entity expressly assumes the Company's obligations on all Debt Securities and under such Indenture, (ii) immediately after giving effect to the transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing, and (iii) the Company shall have delivered to the respective Indenture Trustee an Officer's Certificate and an Opinion of Counsel as provided in such Indenture (Indenture, Section 1101). The terms of an Indenture will not restrict the Company in a merger in which the Company is the surviving entity. Events of Default. Each of the following will constitute an Event of Default under the Indenture with respect to the Debt Securities of any series: (a) failure to pay any interest on the Debt Securities of such series within 30 days after the same becomes due and payable; (b) failure to pay principal or premium, if any, on the Debt Securities of such series when due and payable; (c) failure to perform, or breach of, any other covenant or warranty of the Company in such Indenture (other than a covenant or warranty of the Company in such Indenture solely for the benefit of one or more series of Debt Securities other than such series) for 90 days after written notice to the Company by the respective Indenture Trustee, or to the Company and such Indenture Trustee by the Holders of at least 33% in principal amount of the Debt Securities of such series Outstanding under such Indenture as provided in such Indenture; (d) the entry by a court having jurisdiction in the premises of (1) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (2) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition by one or more Persons other than the Company seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for the Company or for any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for relief or any such other decree or order shall have remained unstayed and in effect 7 for a period of 90 consecutive days; and (e) the commencement by the Company of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in a case or other similar proceeding or to the commencement of any bankruptcy or insolvency case or proceeding against it under any applicable federal or state law or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the authorization of such action by the Board of Directors (Indenture, Section 801). An Event of Default with respect to the Debt Securities of a particular series may not necessarily constitute an Event of Default with respect to Debt Securities of any other series issued under the same Indenture or Debt Securities issued under any other Indenture. Remedies. If an Event of Default due to the default in payment of principal of or interest on any series of Debt Securities or due to the default in the performance or breach of any other covenant or warranty of the Company applicable to the Debt Securities of such series but not applicable to all series of Debt Securities issued under the same Indenture occurs and is continuing, then either the respective Indenture Trustee or the Holders of not less than 33% in principal amount of the outstanding Debt Securities of such series may declare the principal of all of the Debt Securities of such series and interest accrued thereon to be due and payable immediately. If an Event of Default due to the default in the performance of any other covenants or agreements in an Indenture applicable to all Outstanding Debt Securities under such Indenture or due to certain events of bankruptcy, insolvency or reorganization of the Company has occurred and is continuing, either the respective Indenture Trustee or the Holders of not less than 33% in principal amount of all such Outstanding Debt Securities, considered as one class, and not the Holders of the Debt Securities of any one of such series, may make such declaration of acceleration. At any time after the declaration of acceleration with respect to the Debt Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained, the Event or Events of Default giving rise to such declaration of acceleration will, without further act, be deemed to have been waived, and such declaration and its consequences will, without further act, be deemed to have been rescinded and annulled, if: (a) the Company has paid or deposited with the respective Indenture Trustee a sum sufficient to pay (1) all overdue interest on all Debt Securities of such series; (2) the principal of and premium, if any, on any Debt Securities of such series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Debt Securities; (3) interest upon overdue interest at the rate or rates prescribed therefor in such Debt Securities, to the extent that payment of such interest is lawful; and (4) all amounts due to such Indenture Trustee under the respective Indenture; and (b) any other Event or Events of Default with respect to Debt Securities of such series, other than the nonpayment of the principal of the Debt Securities of such series which has become due solely by such declaration of acceleration, have been cured or waived as provided in such Indenture (Indenture, Section 802). 8 There is no automatic acceleration, even in the event of bankruptcy, insolvency or reorganization of the Company. Subject to the provisions of an Indenture relating to the duties of the Indenture Trustee in case an Event of Default shall occur and be continuing, the respective Indenture Trustee will be under no obligation to exercise any of its rights or powers under such Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to such Indenture Trustee reasonable security or indemnity (Indenture, Section 903). If an Event of Default has occurred and is continuing in respect of a series of Debt Securities, subject to such provisions for the indemnification of such Indenture Trustee, the Holders of a majority in principal amount of the Outstanding Debt Securities of such series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to such Indenture Trustee, or exercising any trust or power conferred on such Indenture Trustee, with respect to the Debt Securities of such series; provided, however, that if an Event of Default occurs and is continuing with respect to more than one series of Debt Securities under an Indenture, the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of all such series, considered as one class, will have the right to make such direction, and not the Holders of the Debt Securities of any one of such series; and provided, further, that such direction will not be in conflict with any rule of law or with such Indenture (Indenture, Section 812). No Holder of Debt Securities of any series will have any right to institute any proceeding with respect to the respective Indenture, or for the appointment of a receiver or a trustee, or for any other remedy thereunder, unless (i) such Holder has previously given to the respective Indenture Trustee written notice of a continuing Event of Default with respect to the Debt Securities of such series, (ii) the Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of all series under such Indenture in respect of which an Event of Default shall have occurred and be continuing, considered as one class, have made written request to such Indenture Trustee, and such Holder or Holders have offered reasonable indemnity to such Indenture Trustee to institute such proceeding in respect of such Event of Default in its own name as trustee and (iii) such Indenture Trustee has failed to institute any proceeding, and has not received from the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of such series a direction inconsistent with such request, within 60 days after such notice, request and offer (Indenture, Section 807). However, such limitations do not apply to a suit instituted by a Holder of a Debt Security for the enforcement of payment of the principal of or any premium or interest on such Debt Security on or after the applicable due date specified in such Debt Security (Indenture, Section 808). The Company will be required to furnish to each Indenture Trustee annually a statement by an appropriate officer as to such officer's knowledge of the Company's compliance with all conditions and covenants under the respective Indenture, such compliance to be determined without regard to any period of grace or requirement of notice under such Indenture (Indenture, Section 606). Modification and Waiver. Without the consent of any Holder of Debt Securities, the Company and the Indenture Trustee under an Indenture may enter into one or more supplemental indentures for any of the following purposes: (a) to evidence the assumption by any permitted successor to the Company of the covenants of the Company in such Indenture and in any of the Debt Securities Outstanding under such Indenture; or (b) to add one or more covenants of the Company or other provisions for the benefit of all Holders or for the benefit of the Holders of, or to remain in effect only so long as there shall be Outstanding, Debt Securities of one or more specified series, or one or more specified Tranches thereof, or to surrender any right or power conferred upon the Company by such Indenture; or (c) to add any additional Events of Default with respect to Outstanding Debt Securities; or (d) to change or eliminate any provision of such Indenture or to add any new provision to such Indenture, provided that if such change, elimination or addition will adversely affect the interests of the Holders of Debt Securities of any series or Tranche in any material respect, such change, elimination or addition will become effective with respect to such series or Tranche only (1) when the consent of the Holders 9 of Debt Securities of such series or Tranche has been obtained in accordance with such Indenture, or (2) when no Debt Securities of such series or Tranche remain Outstanding under such Indenture; or (e) to provide collateral security for all but not part of the Debt Securities issued under such Indenture; or (f) to establish the form or terms of Debt Securities of any other series or Tranche as permitted by such Indenture; or (g) to provide for the authentication and delivery of bearer securities and coupons appertaining thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of the vote or consent of, the Holders thereof, and for any and all other matters incidental thereto; or (h) to evidence and provide for the acceptance of appointment of a successor Indenture Trustee or co-trustee with respect to the Debt Securities of one or more series and to add to or change any of the provisions of such Indenture as shall be necessary to provide for or to facilitate the administration of the trusts under such Indenture by more than one trustee; or (i) to provide for the procedures required to permit the utilization of a noncertificated system of registration for the Debt Securities of all or any series or Tranche; or (j) to change any place where (1) the principal of and premium, if any, and interest, if any, on all or any series or Tranche of Debt Securities shall be payable, (2) all or any series or Tranche of Debt Securities may be surrendered for registration of transfer or exchange and (3) notices and demands to or upon the Company in respect of Debt Securities and such Indenture may be served; or (k) to cure any ambiguity or inconsistency or to add or change any other provisions with respect to matters and questions arising under an Indenture, provided such changes or additions shall not adversely affect the interests of the Holders of Debt Securities of any series or Tranche Outstanding under such Indenture in any material respect (Indenture, Section 1201). The Holders of a majority in aggregate principal amount of the Debt Securities of all series then Outstanding under an Indenture may waive compliance by the Company with certain restrictive provisions of such Indenture (Indenture, Section 607). The Holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may waive any past default under an Indenture with respect to such series, except a default in the payment of principal, premium, or interest and certain covenants and provisions of such Indenture that cannot be modified or be amended without the consent of the Holder of each Outstanding Debt Security of such series affected (Indenture, Section 813). Without limiting the generality of the foregoing, if the Trust Indenture Act is amended after the date of an Indenture in such a way as to require changes to such Indenture or the incorporation therein of additional provisions or so as to permit changes to, or the elimination of, provisions which, at the date of such Indenture or at any time thereafter, were required by the Trust Indenture Act to be contained in such Indenture, such Indenture will be deemed to have been amended so as to conform to such amendment of the Trust Indenture Act or to effect such changes, additions or elimination, and the Company and the Indenture Trustee may, without the consent of any Holders, enter into one or more supplemental indentures to evidence or effect such amendment (Indenture, Section 1201). Except as provided above, the consent of the Holders of a majority in aggregate principal amount of the Debt Securities of all series then Outstanding under an Indenture, considered as one class, is required for the purpose of adding any provisions to, or changing in any manner, or eliminating any of the provisions of, such Indenture or modifying in any manner the rights of the Holders of such Debt Securities under such Indenture pursuant to one or more supplemental indentures; provided, however, that if less than all of the series of Debt Securities Outstanding under an Indenture are directly affected by a proposed supplemental indenture, then the consent only of the Holders of a majority in aggregate principal amount of Outstanding Debt Securities of all series under such Indenture so directly affected, considered as one class, shall be required; and provided, further, that if the Debt Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Debt Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of all Tranches of such series so directly affected, considered as one class, will be required; and provided further, that no such amendment or modification may (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Debt Security, or reduce the principal amount thereof or the rate of 10 interest thereon (or the amount of any installment of interest thereon) or change the method of calculating such rate or reduce any premium payable upon the redemption thereof, or change the coin or currency (or other property) in which any Debt Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity of any Debt Security (or, in the case of redemption, on or after the redemption date) without, in any such case, the consent of the Holder of such Debt Security, (b) reduce the percentage in principal amount of the Outstanding Debt Securities of any series, or any Tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of such Indenture or any default thereunder and its consequences, or reduce the requirements for quorum or voting, without, in any such case, the consent of the Holder of each outstanding Debt Security of such series or Tranche, or (c) modify certain of the provisions of such Indenture relating to supplemental indentures, waivers of certain covenants and waivers of past defaults with respect to the Debt Securities of any series or Tranche, without the consent of the Holder of each Outstanding Debt Security under such Indenture affected thereby. A supplemental indenture which changes or eliminates any covenant or other provision of an Indenture which has expressly been included solely for the benefit of one or more particular series of Debt Securities or one or more Tranches thereof, or modifies the rights of the Holders of Debt Securities of such series with respect to such covenant or other provision, will be deemed not to affect the rights under such Indenture of the Holders of the Debt Securities of any other series or Tranche (Indenture, Section 1202). Each Indenture provides that in determining whether the Holders of the requisite principal amount of the Outstanding Debt Securities have given any request, demand, authorization, direction, notice, consent or waiver under such Indenture, or whether a quorum is present at the meeting of the Holders of Debt Securities, Debt Securities owned by the Company or any other obligor upon the Debt Securities or any affiliate of the Company or of such other obligor (unless the Company, such affiliate or such obligor owns all Debt Securities Outstanding under such Indenture, determined without regard to this provision) shall be disregarded and deemed not to be Outstanding. If the Company shall solicit from Holders any request, demand, authorization, direction, notice, consent, election, waiver or other Act, the Company may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other such Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the Outstanding Debt Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Debt Securities shall be computed as of the record date. Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder shall bind every future Holder of the same Debt Security and the Holder of every Debt Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by an Indenture Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Debt Security (Indenture, Section 104). Resignation of an Indenture Trustee. An Indenture Trustee may resign at any time by giving written notice thereof to the Company or may be removed at any time with respect to the respective Indenture by Act of the Holders of a majority in principal amount of all series of Debt Securities then Outstanding under such Indenture delivered to such Indenture Trustee and the Company. No resignation or removal of an Indenture Trustee and no appointment of a successor trustee will become effective until the acceptance of appointment by a successor trustee in accordance with the requirements of the respective Indenture. So long as no Event of Default or event which, after notice or lapse of time, or both, would become an Event of Default has occurred and is continuing and except with respect to an Indenture Trustee appointed by Act of the Holders, if the Company has delivered to the Indenture Trustee a 11 resolution of its Board of Directors appointing a successor trustee and such successor has accepted such appointment in accordance with the terms of the respective Indenture, such Indenture Trustee will be deemed to have resigned and the successor will be deemed to have been appointed as trustee in accordance with such Indenture (Indenture, Section 910). Notices. Notices to Holders of Debt Securities will be given by mail to the addresses of such Holders as they may appear in the security register therefor (Indenture, Section 106). Title. The Company, the respective Indenture Trustee, and any agent of the Company or such Indenture Trustee, may treat the Person in whose name Debt Securities are registered as the absolute owner thereof (whether or not such Debt Securities may be overdue) for the purpose of making payments and for all other purposes irrespective of notice to the contrary (Indenture, Section 308). Governing Law. Each Indenture and the Debt Securities will be governed by, and construed in accordance with, the laws of the State of New York (Indenture, Section 112). Regarding the Indenture Trustee. The Indenture Trustee under the first Indenture will be The Bank of New York. In addition to acting as Indenture Trustee, The Bank of New York acts, and may act, as trustee under various indentures and trusts of the Company and its affiliates including, but not limited to, the Trust Agreement, Subordinated Indenture and Guarantee, each as described herein. The Company and its affiliates also maintain various banking and trust relationships with The Bank of New York. EXPERTS AND LEGALITY The consolidated financial statements included in the latest Annual Report of the Company on Form 10-K, incorporated herein by reference, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report included in said latest Annual Report of the Company on Form 10-K, and have been incorporated by reference herein in reliance upon such report given upon authority of the firm as experts in accounting and auditing. With respect to any unaudited condensed consolidated interim financial information included in the Company's Quarterly Reports on Form 10-Q which are or will be incorporated herein by reference, Deloitte & Touche LLP has applied limited procedures in accordance with professional standards for reviews of such information. As stated in any of their reports included in the Company's Quarterly Reports on Form 10-Q, which are or will be incorporated herein by reference, Deloitte & Touche LLP did not audit and did not express an opinion on such interim financial information. Deloitte & Touche LLP is not subject to the liability provisions of Section 11 of the 1933 Act for any of their reports on such unaudited condensed consolidated interim financial information because such reports are not "reports" or a "part" of the Registration Statement filed under the 1933 Act with respect to the Securities prepared or certified by an accountant within the meaning of Sections 7 and 11 of the 1933 Act. The legality of the Debt Securities offered hereby will be passed upon for the Company by Worsham, Forsythe & Wooldridge, L.L.P., Dallas, Texas and by Reid & Priest LLP, New York, New York, and for the Underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York. However, all matters pertaining to incorporation of the Company and all other matters of Texas law will be passed upon only by Worsham, Forsythe & Wooldridge, L.L.P. At October 31, 1997, members of the firm of Worsham, Forsythe & Wooldridge, L.L.P. owned approximately 41,200 shares of the common stock of Texas Utilities, which owns all of the common stock of the Company. 12 PLAN OF DISTRIBUTION The Company may sell the Debt Securities in any of three ways: (i) through underwriters or dealers; (ii) directly to a limited number of purchasers or to a single purchaser; or (iii) through agents. The Prospectus Supplement with respect to the Offered Debt Securities sets forth the terms of the offering of the Offered Debt Securities, including the name or names of any underwriters, dealers or agents, the purchase price of such Offered Debt Securities and the proceeds to the Company from such sale, any underwriting discounts and other items constituting underwriters' compensation, any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. If underwriters are used in the sale, the Offered Debt Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of the sale. The underwriter or underwriters with respect to a particular underwritten offering of Offered Debt Securities are named in the Prospectus Supplement relating to such offering and, if an underwriting syndicate is used, the managing underwriter or underwriters are set forth on the cover page of such Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase the Offered Debt Securities will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all such Offered Debt Securities if any are purchased. Subject to certain conditions, the Company may agree to indemnify the several underwriters or agents and their controlling persons against certain liabilities, including liabilities under the 1933 Act arising out of or based upon, among other things, any untrue statement or alleged untrue statement of a material fact contained in the registration statement, this Prospectus, a Prospectus Supplement or the Incorporated Documents 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. See the applicable Prospectus Supplement. NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON, UNDERWRITER, DEALER OR AGENT. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. 13 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article 2.02-1 of the Texas Business Corporation Act permits the Company, in certain circumstances, to indemnify any present or former director, officer, employee or agent of the Company against judgments, penalties, fines, settlements and reasonable expenses incurred in connection with a proceeding in which any such person was, is or is threatened to be, made a party by reason of holding such office or position, but only to a limited extent for obligations resulting from a proceeding in which the person is found liable on the basis that a personal benefit was improperly received or in circumstances in which the person is found liable in a derivative suit brought on behalf of the Company. Article Eight of the Restated Articles of Incorporation of the Company, as amended, provides as follows: "No director of this Corporation shall be liable to this Corporation or its shareholders for monetary damages for an act or omission in such director's capacity as a director of this Corporation, except this Article Eight does not eliminate or limit the liability of a director of this Corporation for (1) a breach of the director's duty of loyalty to this Corporation or its shareholders, (2) an act or omission not in good faith or that involves intentional misconduct or a knowing violation of the law, (3) a transaction from which the director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director's office, (4) an act or omission for which the liability of the director is expressly provided for by statute, or (5) an act related to an unlawful stock repurchase or payment of a dividend. Section 1 of Article XIII of the Company's Bylaws is as follows: "Section 1. The corporation shall indemnify any person who (1) is or was a director, officer, employee or agent of the corporation, or (2) while a director, officer, employee or agent of the corporation, its divisions or subsidiaries, is or was serving at the request of the corporation, pursuant to a resolution adopted by the Board of Directors, as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, to the fullest extent that a corporation may or is required to grant indemnification to a director under the Texas Business Corporation Act. The corporation, pursuant to a resolution adopted by the Board of Directors, may indemnify any such person to such further extent as permitted by law." The Company has entered into agreements with certain of its officers and directors which provide, among other things, for their indemnification by the Company to the fullest extent permitted by Texas law. The Company has insurance covering its expenditures which might arise in connection with its lawful indemnification of its directors and officers for their liabilities and expenses. Directors and officers of the Company also have insurance which insures them against certain other liabilities and expenses. II-1 ITEM 16. EXHIBITS. PREVIOUSLY FILED* ------------------------ WITH FILE AS EXHIBIT NUMBER EXHIBIT ------- --------- ------- 1(a) -- Form of Underwriting Agreement for Debt Securities. 1(b)** -- Form of Distribution (Sales Agency) Agreement. 4(a)-1 1-3183 Form 10-K 3.1 -- Restated Articles of December 31, 1996 Incorporation of the Company, as amended through December 31, 1996. 4(a)-2 333-43811 and 4(a)-2 -- Articles of Merger of 333-43811-01 Lone Star Energy Company with and into the Company. 4(a)-3 333-43811 and 4(a)-3 -- Articles of Merger of 333-43811-01 Enserch Exploration Holdings, Inc. with and into the Company. 4(a)-4 333-43811 and 4(a)-4 -- Assumed Name 333-43811-01 Certificate re. Lone Star Energy Company. 4(a)-5a 333-43811 and 4(a)-5a -- Articles of Merger of 333-43811-01 ENSERCH Merger Corp. with and into the Company. 4(a)-5b 333-12391 2(a) - Annex I to Articles of Merger of ENSERCH Merger Corp. with and into the Company (Amended and Restated Agreement and Plan of Merger dated as of April 13, 1996 by and among the Company, Texas Utilities and TEI). 4(b) 1-3183 Form 10-K 3.2 -- Bylaws of the Company, December 31, 1994 as amended. 4(c) 333-43811 and 4(c) -- Form of Indenture (For 333-43811-01 Unsecured Debt Securities) between the Company and The Bank of New York, Trustee. 4(d) 333-43811 and 4(d) -- Form of Officer's 333-43811-01 Certificate, establishing the Debt Securities, with Form of Debt Security attached. 5(a) -- Opinion of Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for the Company. 5(b) -- Opinion of Reid & Priest LLP, of Counsel to the Company. 12 -- Computation of Ratio of Earnings to Fixed Charges of the Company. 15 -- Letter of Deloitte & Touche LLP regarding unaudited condensed interim financial information. 23(a) -- Independent Auditors' Consent. 23(b) -- Consents of Worsham, Forsythe & Wooldridge, L.L.P., Reid & Priest LLP, are contained in Exhibits 5(a) and 5(b), respectively. 24 -- Power of Attorney (see Page II-4). II-2 25(a) -- Statement on Form T-1 of The Bank of New York with respect to the Indenture of the Company. ----------------------------------------- *Incorporated herein by reference. **To be filed by amendment. II-3 POWER OF ATTORNEY Each director, and/or officer of ENSERCH Corporation whose signature appears below hereby appoints the Agents for Service named in this registration statement, and each of them severally, as his attorney-in-fact to sign in his name and behalf, in any and all capacities stated below, and to file with the Securities and Exchange Commission, any and all amendments, including post- effective amendments, to this registration statement, and each registrant hereby also appoints each such Agent for Service as its attorney-in-fact with like authority to sign and file any such amendments in its name and on its behalf. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, and State of Texas, on the 15th day of January, 1998. ENSERCH CORPORATION By: /s/ Erle Nye -------------------------------- (Erle Nye, Chairman of the Board and Chief Executive) Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated. SIGNATURE TITLE DATE --------- ----- ---- /s/ Erle Nye Principal --------------------------- Executive January 15, 1998 (Erle Nye, Chairman of Officer and the Board and Chief Director Executive) /s/ Robert S. Shapard Principal January 15, 1998 --------------------------- Financial (Robert S. Shapard) Officer /s/ Jerry W. Pinkerton Principal January 15, 1998 --------------------------- Accounting (Jerry W. Pinkerton) Officer /s/ D. W. Biegler Director January 15, 1998 --------------------------- (D. W. Biegler) /s/ Barbara Curry Director January 15, 1998 --------------------------- (Barbara Curry) /s/ H. Jarrell Gibbs Director January 15, 1998 --------------------------- (H. Jarrell Gibbs) /s/ Michael J. McNally Director January 15, 1998 --------------------------- (Michael J. McNally) /s/ Robert A. Wooldridge Director January 15, 1998 ---------------------------- (Robert A. Wooldridge) II-4 EXHIBIT INDEX PREVIOUSLY FILED* ------------------------ WITH FILE AS EXHIBIT NUMBER EXHIBIT ------- --------- ------- 1(a) -- Form of Underwriting Agreement for Debt Securities. 1(b)** -- Form of Distribution (Sales Agency) Agreement. 4(a)-1 1-3183 Form 10-K 3.1 -- Restated Articles of December 31, 1996 Incorporation of the Company, as amended through December 31, 1996. 4(a)-2 333-43811 and 4(a)-2 -- Articles of Merger of 333-43811-01 Lone Star Energy Company with and into the Company. 4(a)-3 333-43811 and 4(a)-3 -- Articles of Merger of 333-43811-01 Enserch Exploration Holdings, Inc. with and into the Company. 4(a)-4 333-43811 and 4(a)-4 -- Assumed Name 333-43811-01 Certificate re. Lone Star Energy Company. 4(a)-5a 333-43811 and 4(a)-5a -- Articles of Merger of 333-43811-01 ENSERCH Merger Corp. with and into the Company. 4(a)-5b 333-12391 2(a) - Annex I to Articles of Merger of ENSERCH Merger Corp. with and into the Company (Amended and Restated Agreement and Plan of Merger dated as of April 13, 1996 by and among the Company, Texas Utilities and TEI). 4(b) 1-3183 Form 10-K 3.2 -- Bylaws of the Company, December 31, 1994 as amended. 4(c) 333-43811 and 4(c) -- Form of Indenture (For 333-43811-01 Unsecured Debt Securities) between the Company and The Bank of New York, Trustee. 4(d) 333-43811 and 4(d) -- Form of Officer's 333-43811-01 Certificate, establishing the Debt Securities, with Form of Debt Security attached. 5(a) -- Opinion of Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for the Company. 5(b) -- Opinion of Reid & Priest LLP, of Counsel to the Company. 12 -- Computation of Ratio of Earnings to Fixed Charges of the Company. 15 -- Letter of Deloitte & Touche LLP regarding unaudited condensed interim financial information. 23(a) -- Independent Auditors' Consent. 23(b) -- Consents of Worsham, Forsythe & Wooldridge, L.L.P., Reid & Priest LLP, are contained in Exhibits 5(a) and 5(b), respectively. 24 -- Power of Attorney (see Page II-4). 25(a) -- Statement on Form T-1 of The Bank of New York with respect to the Indenture of the Company. ----------------------------------------- *Incorporated herein by reference. **To be filed by amendment. EX-1 2 EXHIBIT 1(A) Exhibit 1(a) ENSERCH Corporation Unsecured Debt Securities UNDERWRITING AGREEMENT ---------------------- [Date] as Representatives of the Underwriters named in Schedule I hereto c/o Ladies and Gentlemen: 1. Introduction. ENSERCH Corporation, a Texas ------------ corporation (the "Company"), proposes to issue and sell severally to you (the "Underwriters"): the Company's unsecured debt securities of the series designation, with the terms and in the principal amount specified in Schedule I hereto (the "Debt Securities"). 2. Description of Debt Securities. The Company ------------------------------ proposes to issue the Debt Securities under its Indenture (for Unsecured Debt Securities), dated as of _________, ____, to The Bank of New York, Trustee (the "Indenture Trustee"), said Indenture, together with any amendments or supplements thereto, being hereinafter referred to as the "Indenture". 3. Representations and Warranties of the Company. --------------------------------------------- The Company represents and warrants to the several Underwriters that: (a) It has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3, as amended by Amendments Nos. 1 and 2 thereto, including a prospectus, on April 5, 1994 (Registration No. 33-52525) ("Original Registration Statement") for the registration of $450,000,000 aggregate amount of the Company's debt securities, Preferred Stock, Depositary Shares and Common Stock and the Preferred Securities ("LLC Securities") of the Company's affiliate, ENSERCH Capital L.L.C. and the Backup Undertakings of the Company and its subsidiary, Enserch Preferred Capital, Inc. with respect to the LLC Securities ("Backup Undertakings"), under the Securities Act of 1933, as amended (the "Securities Act"). Such registration statement was declared effective by the Commission on April 5, 1994. The Company also filed with the Commission post- effective amendment no. 1 (the "Post-Effective Amendment") to the Original Registration Statement on January , 1998 to withdraw from registration the LLC Securities and the Backup Undertakings and to amend the terms of the debt securities registered with the Commission pursuant to the Original Registration Statement. The Post-Effective Amendment was declared effective by the Commission on January , 1997. References herein to the term "Registration Statement" as of any date shall be deemed to refer to the Original Registration Statement, as amended or supplemented to such date, including all documents incorporated by reference therein as of such date pursuant to Item 12 of Form S-3 ("Incorporated Documents"). References herein to the term "Prospectus" as of any given date shall be deemed to refer to the prospectus forming a part of the Post-Effective Amendment, as amended or supplemented as of such date, including all Incorporated Documents as of such date. References herein to the term "Effective Date" shall be deemed to refer to the time and date the Post Effective Amendment 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 fully complied and at the Closing Date, as hereinafter defined, the Registration Statement, the Prospectus and the Indenture will fully comply in all material respects with the applicable provisions of the Securities Act, the Trust Indenture Act of 1939, as amended ("Trust Indenture Act"), and the applicable rules and regu- lations of the Commission thereunder; on the Effective Date the Registration Statement did not, and at the Closing Date, as hereinafter defined, the Registration Statement will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; on the Effective Date the Prospectus did not, and at the Closing Date, as hereinafter defined, and on the date it is filed with, or transmitted for filing to, the Commission pursuant to Rule 424 of the General Rules and Regulations of the Securities Act ("Rule 424"), the Prospectus will not, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and on said dates the Incorporated Documents, taken together as a whole, fully complied or will comply in all material respects with the applicable provisions of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the applicable rules and regulations of the Commission thereunder, and, when read together with the Prospectus on said dates did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided that the foregoing representations and warranties in this paragraph (b) shall not apply to statements or omissions made in reliance upon information furnished in writing to the Company by, or on behalf of, any Underwriter for use in connection with the preparation of the Registration Statement or the Prospectus or to any statements in or omissions from the 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 is now a party. 4. Purchase and Sale. On the basis of the ----------------- representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Company shall sell to each of the Underwriters, and each Underwriter shall purchase from the Company, at the time and place herein specified, severally and not jointly, the respective principal amount(s) of the Debt Securities set forth opposite the name of such Underwriter in Schedule II attached hereto, at the purchase price or prices set forth in Schedule I hereto. 5. Time and Place of Closing. Delivery of the Debt ------------------------- Securities against payment therefor by wire transfer in federal funds shall be made at the office of Reid & Priest LLP, 40 West 57th Street, New York, New York, at 10:00 A.M., New York Time, on _____________, or at such other place, time and date as shall be agreed upon in writing by the Company and you or established in accordance with the following paragraph. The hour and date of such delivery and payment are herein called the "Closing Date". The Debt Securities shall be delivered to you for the respective accounts of the Underwriters in fully registered form in such denominations of $1,000 or any multiple thereof and registered in such names as you shall reasonably request in writing not later than the close of business on the second business day prior to the Closing Date, or, to the extent not so requested, registered in the names of the respective Underwriters in such authorized denominations as the Company shall determine. The Company agrees to make the Debt Securities available to you for checking purposes not later than 10:00 A.M., New York Time, on the last business day preceding the Closing Date at the office of Reid & Priest LLP, 40 West 57th Street, New York, New York, 10019. 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 principal amount(s) of the Debt 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 Rules of Fair Practice) and satisfactory to the Company, to purchase, upon the terms herein set forth, the principal amount(s) of the Debt 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 such non-defaulting Underwriters to purchase and pay for the respective principal amounts of the Debt Securities that they had severally agreed to purchase hereunder as hereinabove provided and, in addition, the principal amounts of the Debt Securities that the defaulting Underwriter shall have so failed to purchase up to a principal amount thereof equal to one-ninth (1/9) of the respective principal amounts of the Debt Securities that such non-defaulting Underwriters have otherwise agreed to purchase hereunder, and/or (b) to procure one or more persons, who are members of the NASD (or, if not members of the NASD, who are not eligible for membership in the NASD and who agree (i) to make no sales within the United States, its territories or its possessions or to persons who are citizens thereof or residents therein and (ii) in making sales to comply with the NASD's Rules of Fair Practice), to purchase, upon the terms herein set forth, either all or a part of the princi- pal amount(s) of the Debt 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: (a) It will promptly deliver to each of you a signed copy of the Registration Statement as originally filed or, to the extent a signed copy is not available, a conformed copy, certified by an officer of the Company to be in the form as originally filed, including all Incorporated Documents and exhibits and of all amendments thereto. (b) It will deliver to you, as soon as practicable after the date hereof, as many copies of the Prospectus as of such date as you may reasonably request. (c) It will cause the Prospectus to be filed with, or transmitted for filing to, the Commission pursuant to Rule 424 as soon as practicable and advise you of the issuance of any stop order under the Securities Act with respect to the Registration Statement or the institution of any proceedings therefor of which the Company shall have received notice. The Company will use its best efforts to prevent the issuance of any such stop order and to secure the prompt removal thereof if issued. (d) If, during such period of time (not exceeding nine months) after the Prospectus has been filed with, or transmitted for filing to, the Commission pursuant to Rule 424 as in the opinion of Counsel for the Underwriters a prospectus covering the Debt Securities is required by law to be delivered in connection with sales by an Underwriter or dealer, any event relating to or affecting the Company or of which the Company shall be advised in writing by you shall occur that in the Company's reasonable opinion should be set forth in a supplement to, or an amendment of, the Prospectus in order to make the Prospectus not misleading in the light of the circumstances when it is delivered to a purchaser, the Company will, at its expense, amend or supplement the Prospectus by either (i) preparing and furnishing to you at the Company's expense a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus or (ii) making an appropriate filing pursuant to Section 13 of the Exchange Act, which will supplement or amend the Prospectus so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading; provided that should such event relate solely to the activities of any of the Underwriters, then the Underwriters shall assume the expense of preparing and furnishing any such amendment or supplement. In case any Underwriter is required to deliver a prospectus after the expiration of nine months from the date the Prospectus is filed with, or transmitted for filing to, the Commission pursuant to Rule 424, the Company, upon your request, will furnish to you, at the expense of such Underwriter, a reasonable quantity of a supplemental prospectus or supplements to the Prospectus complying with Section 10(a) of the Securities Act. (e) It will make generally available to its security holders, as soon as practicable, an earnings statement (which need not be audited) covering a period of at least twelve months beginning not earlier than the first day of the month next succeeding the month in which occurred the effective date of the Registration Statement as defined in Rule 158 under the Securities Act. (f) It will furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Debt Securities for offer and sale under the blue-sky laws of such jurisdictions as you may designate, provided that the Company shall not be required to qualify as a foreign corporation or dealer in securities, to file any consents to service of process under the laws of any jurisdiction, or to meet any other requirements deemed by the Company to be unduly burdensome. (g) It will, except as herein provided, pay all expenses and taxes (except transfer taxes) in connection with (i) the preparation and filing by it of the Registration Statement, (ii) the issuance and delivery of the Debt Securities as provided in Section 5 hereof, (iii) the qualification of the Debt 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. 7. Conditions of Underwriters' Obligations. The --------------------------------------- obligations of the Underwriters to purchase and pay for the Debt Securities shall be subject to the accuracy of the representations and warranties made herein on the part of the Company, to the performance by the Company of its obligations to be performed hereunder prior to the Closing Date, and to the following conditions: (a) The Prospectus shall have been filed with, or transmitted for filing to, the Commission pursuant to Rule 424 prior to 6:00 P.M., New York Time, on the second business day after the date of this Agreement, or such other time and date as may be approved by you. (b) No stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for that purpose shall be pending before, or threatened by, the Commission on the Closing Date; and you shall have received a certificate, dated the Closing Date and signed by an officer of the Company, to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of the Company threatened by, the Commission. (c) On the Closing Date, you shall have received from Worsham, Forsythe & Wooldridge, L.L.P., General Counsel for the Company, Reid & Priest LLP, of counsel for the Company, and Winthrop, Stimson, Putnam & Roberts, Counsel for the Underwriters, opinions in substantially the form and substance prescribed in Schedules III, IV and V 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 Debt Securities shall be supplemented or amended after the Prospectus shall have been filed with, or transmitted for filing to, the Commission pursuant to Rule 424, with any changes therein necessary to reflect such supplementation or amendment. (d) On and as of the date hereof you shall have received from Deloitte & Touche LLP a letter to the effect that (i) they are independent certified public accountants with respect to the Company, within the meaning of the Securities Act and the applicable published rules and regulations thereunder, (ii) in their opinion, the financial statements audited by them and included or incorporated by reference in the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder, (iii) on the basis of a reading of the unaudited amounts of operating revenues and net income included or incorporated by reference in the Prospectus and the related financial statements from which these amounts were derived, the latest available unaudited financial statements of the Company and the minute books of the Company and inquiries of officers of the Company who have responsibility for financial and accounting matters (it being understood that the foregoing procedures do not constitute an audit made in accordance with generally accepted auditing standards and would not necessarily reveal matters of significance with respect to the comments made in such letter, and accordingly that Deloitte & Touche LLP makes no representation as to the sufficiency of such procedures for the several Underwriters' purposes), nothing has come to their attention that caused them to believe that (A) the unaudited financial statements incorporated by reference in the Prospectus were not determined in accor- dance with generally accepted accounting principles applied on a basis substantially consistent with that of the corresponding amounts in the latest available audited financial statements, (B) the unaudited amounts of operating revenues and net income of the Company included or incorporated by reference in the Prospectus were not determined on a basis substantially consistent with that of the corresponding amounts in the audited statements of income incorporated by reference in the Prospectus, (C) for the twelve months ended as of the date of the latest available financial statements of the Company, there were any decreases in operating revenues or net income as compared with the comparable period of the preceding year, and (D) at a specified date not more than seven days prior to the date of such letter, there was any change in the capital stock of the Company, short-term bank loans, commercial paper, notes payable to Texas Utilities Company or long-term debt of the Company or decrease in its net assets, in each case as compared with amounts shown in the most recent balance sheet incorporated by reference in the Prospectus, except in all instances for changes or decreases that the Prospectus discloses have occurred or may occur or which are occasioned by the declaration of a regular quarterly dividend or the acquisition of long-term debt for sinking fund purposes, or that are described in such letter, and (iv) they have compared the dollar amounts (or percentages or ratios derived from such dollar amounts) and other financial information included or incorporated by reference in the Registration Statement and the Prospectus as reasonably requested by you (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company subject to the internal controls of the Company's accounting system or are derived indirectly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter, and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter. (e) Since the most recent dates as of which in- formation is given in the Registration Statement or the Prospectus there shall not have been any material adverse change in the business, property or financial condition of the Company and, since such dates, there shall not have been any material transaction entered into by the Company, in each case other than transactions in the ordinary course of business and transactions contemplated by the Registration Statement or Prospectus and at the Closing Date you shall have received a certificate to such effect dated the Closing Date and signed by an officer of the Company. (f) All legal proceedings to be taken in connection with the issuance and sale of the Debt Securities shall have been satisfactory in form and substance to Counsel for the Underwriters. In case any of the conditions specified above in this Section 7 shall not have been fulfilled, this Agreement may be terminated with the consent of Underwriters that have agreed to purchase in the aggregate 50% or more of the aggregate principal amount of the Debt Securities and upon notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 6(g) and 9 hereof. 8. Conditions of Company's Obligations. The ----------------------------------- obligation of the Company to deliver the Debt Securities shall be subject to the conditions that the Prospectus shall have been filed with, or transmitted for filing to, the Commission pursuant to Rule 424 prior to 6:00 P.M., New York Time, on the second business day after the date of this Agreement or such other time and date as may be approved by the Company, and no stop order suspending the effectiveness of the Registration Statement shall be in effect at the Closing Date and no proceedings for that purpose shall be pending before, or threatened by, the Commission at the Closing Date. In case these conditions shall not have been fulfilled, this Agreement may be terminated by the Company upon notice thereof to you. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 6(g) and 9 hereof. 9. Indemnification. --------------- (a) The Company shall indemnify, defend and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of Section 15 of the Securities Act from and against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or any other statute or common law and shall reimburse each such Underwriter and controlling person for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or prospectus prior to the Effective Date, or in the Registration Statement or the Prospectus, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading; provided, however, that the indemnity agreement contained in this Section 9 shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of, or based upon, any such untrue statement or alleged untrue statement, or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished in writing to the Company by any Underwriter, through you or otherwise, for use in connection with the preparation of the Registration Statement or the Prospectus or any amendment or supplement to either thereof, or arising out of, or based upon, statements in or omissions from that part of the Registration Statement 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 Debt Securities to any person if a copy of the Prospectus (exclusive of the Incorporated Documents) shall not have been given or sent to such person by or on behalf of such Underwriter with or prior to the written confirmation of the sale involved unless, with respect to the delivery of any amendment or supplement to the Prospectus, the alleged omission or alleged untrue statement was not corrected in such amendment or supplement at the time of such written confirmation. The indemnity agreement of the Company contained in this Section 9 and the representations and warranties of the Company con- tained 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 Debt Securities. (b) Each Underwriter shall indemnify, defend and hold harmless the Company, its officers and directors, and each person who controls the Company within the meaning of Section 15 of the Securities Act, from and against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or any other statute or common law and shall reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to the Company by or on behalf of such Underwriter, through you or otherwise, for use in connection with the preparation of the Registration Statement or the Prospectus or any amendment or supplement to either thereof. Each Underwriter hereby furnishes to the Company in writing expressly for use in the Prospectus (i) the statements relating to offerings by the Underwriters on the cover page, (ii) the statements in the first paragraph on page ___ concerning stabilization and other transactions by the Underwriters, and (iii) under "Underwriters," the list of underwriters and statements in the _______, ________, and _____ paragraphs. The indemnity agreement of the respective Underwriters contained in this Section 9 shall remain operative and in full force and effect regardless of any termination of this Agreement or of any investigation made by or on behalf of the Company, its directors or its officers, any such Underwriter, or any such controlling person, and shall survive the delivery of the Debt Securities. (c) The Company and the several Underwriters each shall, upon the receipt of notice of the commencement of any action against it or any person controlling it as aforesaid, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability that it or they may have to the indemnified party otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given, such indemnifying party shall be entitled to participate at its own expense in the defense, or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party or parties and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional counsel retained by them; but if the indemnifying party shall elect not to assume the defense of such action, such indemnifying party will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and counsel for the indemnifying party shall have reasonably concluded that there may be a conflict of interest involved in the representation by such counsel of both the indemnifying party and the indemnified party, the indemnified party or parties shall have the right to select separate counsel, satisfactory to the indemnifying party, to participate in the defense of such action on behalf of such indemnified party or parties (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel representing the indemnified parties who are parties to such action). (d) If the indemnification provided for in sub- paragraph (a) or (b) above shall be unenforceable under applicable law by an indemnified party, each indemnifying party agrees to contribute to such indemnified party with respect to any and all losses, claims, damages, liabilities and expenses for which each such indemnification provided for in subparagraph (a) or (b) above shall be unenforceable, in such proportion as shall be appropriate to reflect the relative fault of each indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions that have resulted in such losses, claims, damages, liabilities and expenses, as well as any other relevant equitable considerations; provided, however, that no indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party not guilty of such fraudulent misrepresentation. Relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or the indemnified party and each such party's relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and each of the Underwriters agree that it would not be just and equitable if contributions pursuant to this subparagraph (d) were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to above. 10. Termination. This Agreement may be terminated, at ----------- any time prior to the Closing Date, by you with the consent of the Underwriters that have agreed to purchase in the aggregate 50% or more of the aggregate principal amount of the Securities if (a) after the date hereof and at or prior to the Closing Date there shall have occurred any general suspension of trading in securities on the New York Stock Exchange or there shall have been established by the New York Stock Exchange or by the Com- mission or by any federal or state agency or by the decision of any court, any general limitation on prices for such trading or any general restrictions on the distribution of securities, or a general banking moratorium declared by New York or federal authorities, or (b) there shall have occurred any new material (i) outbreak of hostilities or (ii) other national or international calamity or crisis, including, but not limited to, an escalation of hostilities that existed prior to the date of this Agreement, and the effect of any such event specified in clause (a) or (b) above on the financial markets of the United States shall be such as to make it impracticable, in the reasonable judgment of the Underwriters, for the Underwriters to enforce contracts for the sale of the Debt Securities. This Agreement may also be terminated at any time prior to the Closing Date by you with the consent of the Underwriters that have agreed to purchase in the aggregate 50% or more of the aggregate principal amount of the Debt Securities, if, in your reasonable judgment, the subject matter of any amendment or supplement to the Registration Statement or the Prospectus (other than an amendment or supplement relating solely to the activity of any Underwriter or Underwriters) prepared and issued by the Company after the effectiveness of this Agreement shall have disclosed a material adverse change in the business, property or financial condition of the Company that has materially impaired the marketability of the Debt 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 Debt Securities from any of the several Underwriters. 12. Notices. All communications hereunder shall be in ------- writing, and, if to the Underwriters, shall be mailed or delivered to you at the address set forth above, or, if to the Company, shall be mailed or delivered to it at 1601 Bryan Street, Dallas, Texas 75201, Attention: Treasurer. If the foregoing is in accordance with your understanding of our agreement, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter and your acceptance shall constitute a binding agreement between the Company and the several Underwriters in accordance with its terms. Very truly yours, ENSERCH CORPORATION By _____________________________ Accepted and delivered as of the date first above written BY By _______________________ SCHEDULE I ---------- Underwriting Agreement dated: Underwriters: Debt Securities: Designation: Principal Amount: Date of Maturity: Interest Rate: Purchase Price: Public Offering Price: SCHEDULE II ----------- ENSERCH Corporation DEBT SECURITIES Name Principal Amount ---- ---------------- SCHEDULE III [Letterhead of Worsham, Forsythe & Wooldridge, L.L.P.] [Date] as Underwriters named in the Underwriting Agreement, dated, between ENSERCH CORPORATION and such Underwriters c/o Ladies and Gentlemen: We have acted as General Counsel to ENSERCH Corporation (the "Company") in connection with the issuance and sale of $__________ aggregate principal amount of its _____________ (the "Debt Securities") pursuant to the Underwriting Agreement dated __________, ____ among the Company and you (the "Underwriting Agreement"). Terms not otherwise defined herein are used with the meanings ascribed to them in the Underwriting Agreement. 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 Indenture and the Debt Securities. We have also examined such other documents and satisfied ourselves as to such other matters as we have deemed necessary as a basis for the conclusions of law contained in the opinions enumerated 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 deemed appropriate, on certificates of public officials. We have relied upon a certificate of the Indenture Trustee as to the authentication of the Debt Securities. In our examination we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as photostatic or certified copies. Upon the basis of our familiarity with these transactions and with the affairs and properties of the Company generally, we are of the opinion that: i. The Company is a public utility corporation duly authorized by its articles of incorporation, as amended, to conduct the business that 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. The Underwriting Agreement has been duly authorized, executed and delivered by the Company. iii. The Indenture has been duly qualified under the Trust Indenture Act. iv. The Debt Securities and the Indenture have been duly authorized, executed and delivered by the Company, the Debt Securities are entitled to the benefits of the Indenture, and the Debt Securities and the Indenture are legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the effect of bankruptcy, insolvency, reorganization, receivership, moratorium and other laws affecting the rights and remedies of creditors generally and of general principles of equity. v. The statements made in the Prospectus under the captions "Description of the Debt Securities" and "Certain Terms of the __________", 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. vi. Other than as stated, referred to or incorporated by reference in the Registration Statement and the Prospectus, there are no material pending legal proceedings to which the Company is a party or of which property of the Company is the subject which depart from the ordinary routine litigation incident to the kind of business conducted by the Company, and to our best knowledge no such proceedings are contemplated. vii. The Registration Statement, as of the Effective Date, and the Prospectus, at the time it was filed with (or transmitted for filing to) the Commission pursuant to Rule 424 under the Securities Act, (except for financial statements and schedules and financial and statistical data as to which we do not express any belief and except for those parts of the Registration Statement that constitute the Forms T-1) complied as to form in all material respects with the applicable requirements of the Securities Act and the applicable instructions, rules and regulations of the Commission thereunder; the Incorporated Documents (except as to the financial statements and schedules and other financial and statistical data contained therein, as to which we do not express any belief), at the time they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act and the applicable instructions, rules and regulations of the Commission thereunder; and the Registration Statement has become and is effective under the Securities Act and, to our best knowledge, no proceedings for a stop order with respect thereto are pending or threatened under Section 8 of the Securities Act. viii. 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 Debt Securities. In the course of the preparation of the information relating to the Company contained in the Registration Statement and the Prospectus (including the documents incorporated therein by reference), we had discussions with certain of its officers and representatives, with other counsel for the Company, with Deloitte & Touche LLP, the independent certified public accountants who audited certain of the financial statements contained 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 Registration Statement and the Prospectus and take no responsibility therefor except as set forth in paragraph 5 above. However, our examination of the information relating to the Company contained in the Registration Statement and the Prospectus and our discussions did not disclose to us anything which gives us reason to believe that (except for financial statements and schedules and financial and statistical data as to which we do not express any belief and except for those parts of the Registration Statement that constitute the Forms T-1) (i) the Registration Statement, as of the Effective Date, included an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the Prospectus, at the time it was filed with (or transmitted for filing to) the Commission pursuant to Rule 424 under the Securities Act, included, or on the date hereof includes, an untrue statement of a material fact or on such dates omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. We are members of the State Bar of Texas and do not hold ourselves out as experts in the laws of the State of New York. As to all matters of New York law, we have, with your consent, relied upon the opinion of Reid & Priest LLP, New York, New York, of Counsel to the Company. Very truly yours, WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P. By:_________________________ A Partner SCHEDULE IV [Letterhead of Reid & Priest LLP] [Date] as Underwriters named in the Underwriting Agreement, dated, between ENSERCH Corporation and such Underwriters c/o Ladies and Gentlemen: We have acted as counsel to ENSERCH Corporation (the "Company") in connection with the issuance and sale of $_____________ aggregate principal amount of its __________ (the "Debt Securities") pursuant to the Underwriting Agreement dated ______________ among the Company and you (the "Underwriting Agreement"). Terms not otherwise defined herein are used with the meanings ascribed to them in the Underwriting Agreement. 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 Indenture and the Debt Securities. We have also examined such other documents and satisfied ourselves as to such other matters as we have deemed necessary as a basis for the conclusions of law contained in the opinions expressed below. We have relied as to various questions of fact upon the representations and warranties of the Company contained in the Underwriting Agreement and, where we deemed appropriate, on certificates of public officials. We have relied upon a certificate of the Indenture Trustee as to the authentication of the Debt Securities. In our examination we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as photostatic or certified copies. Upon the basis of our familiarity with these transactions and with the affairs and properties of the Company generally, we are of the opinion that: 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 Debt Securities and the Indenture have been duly authorized, executed and delivered by the Company, the Debt Securities are entitled to the benefits of the Indenture, and the Debt Securities and the Indenture are legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the effect of bankruptcy, insolvency, reorganization, receivership, moratorium and other laws affecting the rights and remedies of creditors generally and of general principles of equity; 4. The statements made in the Prospectus under the captions "Description of the Debt Securities" and "Certain Terms of the _________", 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; 5. 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 as to the financial statements and schedules and other financial and statistical data contained therein as to which we do not express any belief and except for those parts of the Registration Statement that constitute the Forms T-1) complied as to form in all material respects with the applicable requirements of the Securities Act and the applicable instructions, rules and regulations of the Commission thereunder; the Incorporated Documents (except as to the financial statements and schedules and other financial and statistical data contained therein, as to which we do not express any belief), at the time they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act and the applicable instructions, rules and regulations of the Commission thereunder; and the Registration Statement has become and is effective under the Securities Act and, to our best knowledge, no proceedings for a stop order with respect thereto are pending or threatened under Section 8 of the Securities Act; and 6. 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 Debt Securities. In the course of the preparation of the information relating to the Company contained in the Registration Statement and the Prospectus (including the documents incorporated therein by reference) we had discussions with certain of its officers and representatives, with other counsel for the Company, with Deloitte & Touche LLP, the independent certified public accountants who audited certain of the financial statements contained 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 Registration Statement and the Prospectus and take no responsibility therefor except as set forth in paragraph 4 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 the financial statements and schedules and other financial and statistical data contained therein, as to which we do not express any belief, and except for those parts of the Registration Statement that constitute the Forms T-1) (i) the Registration Statement, as of the Effective Date, included an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the Prospectus, at the time it was filed with the Commission pursuant to Rule 424 under the Securities Act, included, or on the date hereof includes, an untrue statement of a material fact or on such dates omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. We are members of the New York Bar and do not hold ourselves out as experts in the laws of the State of Texas. As to all matters of Texas law, we have, with your consent, relied upon the opinion of Worsham, Forsythe & Wooldridge, L.L.P., Dallas, Texas, General Counsel for the Company. We believe that you and we are justified in relying on such opinion. Very truly yours, REID & PRIEST LLP SCHEDULE V [Letterhead of Winthrop, Stimson, Putnam & Roberts] [Date] as Underwriters named in the Underwriting Agreement, dated , between ENSERCH Corporation and such Underwriters c/o Ladies and Gentlemen: We have acted as counsel to you in connection with your purchase from ENSERCH Corporation (the "Company") of $__________ aggregate principal amount of its _______________ (the "Debt Securities") pursuant to the Underwriting Agreement, dated ______________, between you and the Company (the "Underwriting Agreement"). We are members of the New York Bar and do not hold ourselves out as experts on the laws of the State of Texas. We have, with your consent, relied upon an opinion of even date herewith addressed to you by Worsham, Forsythe & Wooldridge, L.L.P., of 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 have also reviewed the opinion of Reid & Priest LLP required by paragraph (c) of Section 7 of the Underwriting Agreement, and we believe such opinion to be satisfactory. We have, in addition, examined the documents described in the list of closing papers as having been delivered to you at the closing and such other documents and satisfied ourselves as to such other matters as we have deemed necessary in order to enable us to express this opinion. We have not examined the Debt Securities, except specimens thereof, and have relied upon a certificate of the Trustee as to the authentication thereof. 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. "Registration Statement", "Prospectus" and "Effective Date" as used herein have the same meanings as the same words in the Underwriting Agreement. Based on 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 is duly qualified under the 1939 Act. 3. The Debt Securities and the Indenture have been duly authorized, executed and delivered by the Company, the Debt Securities are entitled to the benefits of the Indenture, and the Debt Securities and the Indenture are legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the effect of bankruptcy, insolvency, reorganization, fraudulent conveyance, receivership, moratorium and other laws affecting the rights and remedies of creditors generally and of general principles of equity. 4. The statements made in the Prospectus under the captions "Description of the Debt Securities" and "Certain Terms of the __________", insofar as they purport to constitute summaries of the documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. 5. 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 Debt Securities as contemplated in the Underwriting Agreement. 6. The Registration Statement, at the Effective Date thereof, and the Prospectus, at the time it was filed with or transmitted for filing to the Commission pursuant to Rule 424 (except in each case as to financial statements and schedules and other financial and statistical data contained or incorporated by reference therein and except for those parts of the Registration Statement that constitute the Forms T-1, upon which we express no opinion), complied as to form in all material respects with the Securities Act. In passing upon the form of the Registration Statement and the form of the Prospectus, we necessarily assume the correctness and completeness of the statements made by the Company and the information included in the Registration Statement and the Prospectus and take no responsibility therefor, except insofar as such statements relate to us and as set forth in paragraph 4 above. In the course of the preparation by the Company of the Registration Statement and the Prospectus, we have had discussions with certain of its officers and representatives, with counsel for the Company, with Deloitte & Touche LLP, the independent public accountants who audited certain of the financial statements incorporated by reference in the Registration Statement and the Prospectus, and with certain of your representatives. Our examination of the Registration Statement and the Prospectus and our discussions did not disclose to us any information which gives us reason to believe that at the Effective Date the Registration Statement contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, at the time it was filed with or transmitted for filing to the Commission pursuant to Rule 424, or at the date hereof, included or includes any 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 or other financial or statistical data contained or incorporated by reference in the Registration Statement or the Prospectus or as to those parts of the Registration Statement that constitute the Forms T-1. This opinion is given to you solely for your use in connection with the Underwriting Agreement and the transactions contemplated thereunder and may not be relied upon by any other person or for any other purpose. Very truly yours, WINTHROP, STIMSON, PUTNAM & ROBERTS EX-5 3 EXHIBIT 5(A) Exhibit 5(a) WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P. ATTORNEYS AND COUNSELORS AT LAW ENERGY PLAZA 1601 BRYAN STREET, 30TH FLOOR DALLAS, TEXAS 75201 ------------------- TELEPHONE (214) 979-3000 FAX (214) 880-0011 January 15, 1998 ENSERCH Corporation Energy Plaza 1601 Bryan Street Dallas, Texas 75201 Ladies and Gentlemen: Reference is made to Post-Effective Amendment No. 1 (Amendment) to Registration Statement No. 33-52525 on Form S-3 (Registration Statement) to be filed by ENSERCH Corporation (Company) on or about the date hereof, with the Securities and Exchange Commission under the Securities Act of 1933, as amended, which amends the terms of the debt securities (Debt Securities) of the Company registered pursuant to the Registration Statement to be issued pursuant to the terms of one or more indentures (each a Debt Securities Indenture). In connection therewith, we have reviewed such documents and records as we have deemed necessary to enable us to express an opinion on the matters covered hereby. Based upon the foregoing, we are of the opinion that: 1. The Company is a corporation validly organized and existing under the laws of the State of Texas. 2. All requisite action necessary to make any Debt Securities valid, legal and binding obligations of the Company will have been taken when: a. A Debt Securities Indenture with respect to such Debt Securities shall have been executed and delivered by a duly authorized officer or representative of the Company and by the trustee under such Debt Securities Indenture; and b. The Board of Directors of the Company, or an officer duly authorized thereby, shall have taken such action, pursuant to the terms of such Debt Securities Indenture, as may be necessary to fix and determine the terms of such Debt Securities, and such Debt Securities shall have been issued and delivered in accordance with the terms and provisions of such Debt Securities Indenture. We are members of the State Bar of Texas and do not hold ourselves out as experts on the laws of New York. As to all matters of New York law, we have with your consent relied upon an opinion of even date herewith addressed to you by Reid & Priest LLP of New York, New York. We hereby consent to the filing of this opinion as an exhibit to the Amendment and to the use of our name as counsel in the Registration Statement as amended. Very truly yours, WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P. By: /s/ Timopthy A. Mack ------------------------ A Partner EX-5 4 EXHIBIT 5(B) REID & PRIEST LLP 40 West 57th Street New York, NY 10019-4097 Telephone 212 603-2000 Fax 212 603-2001 Exhibit 5(b) and 8 January 15, 1998 ENSERCH Corporation Energy Plaza 1601 Bryan Street Dallas, Texas 75201 Ladies and Gentlemen: Reference is made to Post-Effective Amendment No. 1 (Amendment) to Registration Statement No. 33-52525 on Form S-3 (Registration Statement) to be filed by ENSERCH Corporation (Company) on or about the date hereof, with the Securities and Exchange Commission under the Securities Act of 1933, as amended, which amends the terms of the debt securities (Debt Securities) of the Company registered pursuant to the Registration Statement to be issued pursuant to the terms of one or more indentures (each a Debt Securities Indenture). In connection therewith, we have reviewed such documents and records as we have deemed necessary to enable us to express an opinion on the matters covered hereby. Based upon the foregoing, we are of the opinion that: 1. The Company is a corporation validly organized and existing under the laws of the State of Texas. 2. All requisite action necessary to make any Debt Securities valid, legal and binding obligations of the Company will have been taken when: a. A Debt Securities Indenture with respect to such Debt Securities shall have been executed and delivered by a duly authorized officer or representative of the Company and by the trustee under such Debt Securities Indenture; and b. The Board of Directors of the Company, or an officer duly authorized thereby, shall have taken such action, pursuant to the terms of such Debt Securities Indenture, as may be necessary to fix and determine the terms of such Debt Securities, and such Debt Securities shall have been issued and delivered in accordance with the terms and provisions of such Debt Securities Indenture. We are members of the New York Bar and do not hold ourselves out as experts on the laws of Texas. As to all matters of Texas law, we have with your consent relied upon an opinion of even date herewith addressed to you by Worsham, Forsythe & Wooldridge, L.L.P. of Dallas, Texas. We confirm our opinion as set forth under the caption "Certain United States Federal Income Tax Consequences Relating To The Preferred Trust Securities" in the prospectus constituting a part of the Registration Statement. We hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the use of our name as counsel in the Registration Statement. Very truly yours, /s/ Reid & Priest LLP REID & PRIEST LLP EX-12 5 EXHIBIT 12 EXHIBIT 12 ENSERCH CORPORATION AND SUBSIDIARY COMPANIES (A WHOLLY OWNED SUBSIDIARY OF TEXAS UTILITIES COMPANY) COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
Adjusted (1) Historical (1) ----------------------- ------------------- Period From Period From January 1, Nine Acquisition 1997 Months Ended Year Ended Date to through Sept. 30 Dec. 31 Sept. 30 Acquisition 1997 1996 1997(1) Date (1) ------------ --------- --------- --------- (In thousands except ratios) EARNINGS: Income (loss) from continuing operations before extraordinary items $(14,384) $ 1,395 $(13,778) $(15,377) Add: Equity in net losses (income) of less-than 50% owned affiliates 792 3,821 60 732 Dividends received from less-than 50% owned affiliates 222 253 44 178 Total federal income taxes (4,020) 13,124 (6,198) (4,612) Fixed charges (see detail below) 57,981 77,517 13,183 45,021 Amortization of previously capitalized interest 280 334 63 217 -------- ------- -------- -------- Total earnings(2) $ 40,871 $96,444 $ (6,626) $ 26,159 ======== ======= ======== ======== FIXED CHARGES: Interest expense $ 57,372 $ 76,317 $ 13,058 $ 44,537 Rentals representative of the interest factor 609 1,200 125 484 -------- -------- -------- -------- Fixed charges deducted from earnings 57,981 77,517 13,183 45,021 Capitalized interest 146 63 15 131 Total fixed charges 58,127 77,580 13,198 45,152 Preferred dividends adjusted for pretax earnings coverage (3) 22,941 18,246 2,722 8,742 -------- -------- -------- -------- Combined fixed charges and preferred $ 81,068 $ 95,826 $ 15,920 $ 53,894 ======== ======== ======== ======== RATIO OF EARNINGS TO FIXED CHARGES (4) 0.70 1.24 (.50) .58 ======== ======== ======== ======== RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS(5) 0.50 1.01 (.42) .49 ======== ======== ======== ========
Historical(1) Year Ended December 31 ------------------------------------------------------ 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- (In thousands except ratios) EARNINGS: Income (loss) from continuing operations before extraordinary items $ 22,698 $ 13,053 $ 81,452 $(16,037) $ 1,836 Add: Equity in net losses (income) of less-than 50% owned affiliates 3,821 821 406 (385) 36 Dividends received from less-than 50% owned affiliates 253 340 788 766 123 Total federal income taxes 15,738 921 (68,737) 6,636 (2,184) Fixed charges (see detail below) 110,117 89,361 72,222 81,736 99,288 Amortization of previously capitalized interest 16,589 9,871 7,441 7,707 6,547 -------- -------- -------- -------- -------- Total earnings(2) $169,216 $114,367 $93,572 $80,423 $105,646 ======== ======== ======= ======== ======== FIXED CHARGES: Interest expense $94,870 $83,324 $69,310 $77,720 $ 94,475 Rentals representative of the interest factor 15,247 6,037 2,912 4,016 4,813 -------- -------- -------- -------- -------- Fixed charges deducted from earnings 110,117 89,361 72,222 81,736 99,288 Capitalized interest 7,081 18,789 13,473 7,006 6,578 -------- -------- -------- -------- -------- Total fixed charges 117,198 108,150 85,695 88,742 105,866 Preferred dividends adjusted for pretax earnings coverage(3) 19,201 12,515 11,619 12,663 12,952 -------- -------- -------- -------- -------- Combined fixed charges and preferred dividends $136,399 $120,665 $97,314 $101,405 $118,818 ======== ======== ======= ======== ======== RATIO OF EARNINGS TO FIXED CHARGES(4) 1.44 1.06 1.09 0.91 1.00 ======= ======= ======= ======== ====== RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS(5) 1.24 0.95 0.96 0.79 0.89 ======= ======= ======= ======== ======
(1) On August 5, 1997, ENSERCH became a wholly owned subsidiary of Texas Utilities Company (TUC) (Acquisition Date). Immediately prior to ENSERCH's merger with TUC, Enserch Exploration, Inc. (EEX), and Lone Star Energy Plan Operations, Inc. (LSEPO) were merged to form a new company (New EEX) and ENSERCH distributed to its common shareholders its ownership interest in these businesses. TUC accounted for its acquisition of ENSERCH as a purchase and purchase accounting adjustments, including amortization of goodwill, have been reflected in the computation of the ratios of earnings to fixed charges and ratios of earnings to combined fixed charges and preferred dividends of ENSERCH for the periods subsequent to August 5, 1997. Historical ratios of earnings to fixed charges and ratio of earnings to combined fixed charges and preferred dividends for the periods ended before August 5, 1997, were prepared using ENSERCH's historical basis of accounting. Amounts for the period from January 1, 1997 to Acquisition Date have been restated to reflect EEX and LSEPO as discontinued operations. Ratios for years prior to 1997 were prepared using ENSERCH's historical basis of accounting. Adjusted - Ratios are based on unaudited "pro forma" financial information included in a Form 8-K dated January 6, 1998, incorporated by reference elsewhere in this Registration Statement, which gives effect to: (1) the distribution by ENSERCH to its common shareholders of its interest in EEX and LSEPO; and (2) push down accounting of purchase accounting adjustments from the TUC merger, all on a pro forma basis as if the events had occurred at the beginning of each period presented. (2) "Earnings" represent the aggregate of (a) income from continuing operations before extraordinary items, (b) income taxes, (c) amortization of previously capitalized interest and (d) fixed charges deducted from earnings, on a total enterprise basis. "Fixed Charges" represent interest expense, capitalized interest and the portion of rental expense representative of the interest factor. (3) The preferred stock dividend requirements are assumed to be equal to the pretax earnings which would be required to cover such dividend requirements. The amount of such pretax earnings required to cover preferred stock dividends was computed using tax rates for the applicable period. For the Adjusted periods, the effective tax rates used exclude the impact of "pro forma" goodwill amortization on pretax earnings because of the abnormal impact on effective tax rates of nondeductible goodwill amortization. For the Historical years ended December 31, 1994, 1993 and 1992 the Corporation's effective tax rate was a negative percentage of the pretax income or loss. Therefore, for these years only, the preferred stock dividends have not been adjusted to a pretax equivalent since such an adjustment would have been antidilutive to the ratio of earnings to fixed charges and preferred dividends. (4) For the Adjusted nine months ended September 30, 1997, fixed charges exceeded earnings by $17.3 million. For the Historical periods from Acquisition Date to September 30, 1997, from January 1, 1997 to Acquisition Date and for the years ended December 31, 1993 and 1992, fixed charges exceeded earnings by $19.8 million, $19.0 million, $8.3 million and $.2 million, respectively. (5) For the Adjusted nine months ended September 30, 1997 combined fixed charges and preferred dividends exceeded earnings by $40.2 million. For the Historical period from Acquisition Date to September 30, 1997, from January 1, 1997 to Acquisition Date and for the years ended December 31, 1995, 1994, 1993 and 1992, combined fixed charges and preferred dividends exceeded earnings by $22.5 million, $27.7 million, $6.3 million, $3.7 million, $21.0 million and $13.2 million, respectively. EX-15 6 EXHIBIT 15 EXHIBIT 15 ENSERCH Corporation: We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim condensed consolidated financial information of ENSERCH Corporation and subsidiary companies included in your Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997; June 30, 1997 and September 30, 1997, as indicated in our reports dated May 7, 1997; August 13, 1997 and November 12, 1997; because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which were included in your Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997; June 30, 1997 and September 30, 1997, are being incorporated by reference in this Post Effective Amendment No. 1 to Registration Statement No. 33-52525. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. /s/ Deloitte & Touche LLP Dallas, Texas January 15, 1998 EX-23 7 EXHIBIT 23(A) EXHIBIT 23(a) INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Post- Effective Amendment No. 1 to Registration Statement No. 33-52525 of ENSERCH Corporation of our report dated February 10, 1997, appearing in the ENSERCH Corporation Annual Report on Form 10-K for the year ended December 31, 1996, and to the reference to us under the heading "Experts and Legality" in such Registration Statement. /s/ Deloitte & Touche LLP Dallas, Texas January 15, 1998 EX-25 8 EXHIBIT 25(A) Exhibit 25(a) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________ ----------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (Jurisdiction of incorporation (I.R.S. Employer if not a U.S. national bank) Identification No.) 48 Wall Street, New York, New York 10286 (Address of principal executive offices) (Zip code) ----------------- ENSERCH CORPORATION (Exact name of obligor as specified in its charter) Texas 75-2527254 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) Energy Plaza, 1601 Bryan Street Dallas, Texas 75201 (Address of principal executive offices) (Zip code) ----------------- DEBT SECURITIES* (Title of the indenture securities) - -------- * Specific title(s) to be determined in connection with sale(s) of Debt Securities. ITEM 1. GENERAL INFORMATION.** Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006 State of New York and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington, D.C. 20429 New York Clearing House Association New York, N.Y. (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. None. (See Note on page 2.) ITEM 16. LIST OF EXHIBITS. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of Practice. 1. - A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. - The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. - A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. - -------- ** Pursuant to General Instruction B, the Trustee has responded only to Items 1, 2 and 16 of this form since to the best of the knowledge of the Trustee the obligor is not in default under any indenture under which the Trustee is a trustee. NOTE Inasmuch as this Form T-1 is being filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 15th day of January, 1998. THE BANK OF NEW YORK By: WALTER N. GITLIN ---------------------- Walter N. Gitlin Vice President - 2 - EXHIBIT 7 (Page 1 of 3) Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 1997, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS in Thousands - ------ ------------ Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin......................................... $ 5,004,638 Interest-bearing balances..................................... 1,271,514 Securities: Held-to-maturity securities.................................... 1,105,782 Available-for-sale securities................................... 3,164,271 Federal funds sold and Securities purchased under agreements to resell......................... 5,723,829 Loans and lease financing receivables: Loans and leases, net of unearned income........................................... 34,916,196 LESS: Allowance for loan and lease losses...................................... 581,177 LESS: Allocated transfer risk reserve........................................... 429 Loans and leases, net of unearned income, allowance, and reserve............................... 34,334,590 Assets held in trading accounts................................... 2,035,284 Premises and fixed assets (including capitalized leases)............................................. 671,664 Other real estate owned........................................... 13,306 Investments in unconsolidated subsid- iaries and associated companies................................. 210,685 Customers' liability to this bank on acceptances outstanding....................................... 1,463,446 Intangible assets................................................. 753,190 Other assets....................................................... 1,784,796 ----------- Total assets...................................................... $57,536,995 =========== EXHIBIT 7 (Page 2 of 3) LIABILITIES - ----------- Deposits: In domestic offices............................................ $27,270,824 Noninterest-bearing................................ 12,160,977 Interest-bearing................................... 15,109,847 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................... 14,687,806 Noninterest-bearing................................ 657,479 Interest-bearing................................... 14,030,327 Federal funds purchased and Securities sold under agreements to repurchase ............................ 1,946,099 Demand notes issued to the U.S. Treasury....................................................... 283,793 Trading liabilities.............................................. 1,553,539 Other borrowed money: With remaining maturity of one year or less.................... 2,245,014 With remaining maturity of more than one year through three years ................................. 0 With remaining maturity of more than three years.................................................. 45,664 Bank's liability on acceptances executed and outstanding....................................... 1,473,588 Subordinated notes and debentures................................ 1,018,940 Other liabilities................................................ 2,193,031 ---------- Total liabilities................................................ 52,718,298 ---------- EQUITY CAPITAL - -------------- Common stock..................................................... 1,135,284 Surplus.......................................................... 731,319 Undivided profits and capital reserves....................................................... 2,943,008 Net unrealized holding gains (losses) on available-for-sale securities............................... 25,428 Cumulative foreign currency translation adjustments........................................ (16,342) ----------- Total equity capital............................................. 4,818,697 ----------- Total liabilities and equity capital............................. $57,536,995 =========== EXHIBIT 7 (Page 3 of 3) I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot ) Thomas A. Renyi ) Directors Alan R. Griffith ) -----END PRIVACY-ENHANCED MESSAGE-----